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I’ve been trading gap fills for years, and I’ve learned something counterintuitive that’s completely changed how I approach the bigger moves. When you see those massive gaps — the kind that make you do a double-take — your instinct might be to swing for the fences and target the full gap fill.
But here’s what I’ve discovered: sometimes aiming for less actually gets you more.
Here’s the thing about gap trading that most people miss. When a gap exceeds roughly 7.5%, I completely change my approach. Instead of targeting the full gap fill, I switch to what I call a half-gap target.
Take a recent example I was analyzing — a stock that gapped down hard. This gap was about 12%, which is significant.
Rather than going after that entire move, I target about 6% of the gap fill — essentially half the distance — because I don’t necessarily want to go for the full thing, since that could take some time. This simple adjustment can be a game-changer for your trading results, especially on larger gaps.
Why Bigger Isn’t Always Better
When you break it down, a 12% move is massive, and that kind of distance demands patience, and patience in trading can sometimes work against you. Targeting half the gap means you’re still capturing meaningful profits but doing it with a much higher probability of success.
This approach also means you don’t have to tie up your capital for weeks. Instead of waiting for that full gap fill that might drag out, you can get in and out a little quicker for faster moves, then move on to the next one.
It’s a smoother, more efficient way to trade big gap scenarios.
The Numbers That Matter
On these half-gap targets, I’ve seen trades hit their target in as little as three days. Three days until target — that’s the power of working with momentum instead of trying to squeeze every last cent out of the move. It’s a smart way to approach trades where the gap is so big.
Some traders want the best of both worlds. If you’re trading two contracts or more, you can take one contract off at the half gap and let the other one ride for the larger payout. It’s next-level thinking that balances your need for consistent wins with the potential for bigger scores.
But if you’re working with one contract and you want to be more conservative, have a higher win rate and be in and out of trades a little quicker, then the half-gap approach is your friend.
The beauty of this strategy isn’t just in the faster profits — it’s in the flexibility it gives you. You’re not married to one position for weeks, hoping and waiting. You’re making calculated moves, taking profits and moving your capital to the next opportunity.
Graham Lindman
Graham Lindman Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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