23# Win One for the Gapper Trading System

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Win One for the Gapper strategy begins with an indicator that measures the amount of "trendiness" (directional movement) in a market, then adds a pattern designed by Larry Williams. First, the strategy employs the Directional Movement Index to determine the direction of the market and whether the market is in a choppy or trending mode. Second, the strategy looks for an opening gap against the direction of the trend. Third, the strategy enters a position when the gap is closed (the opening gap setup and trigger are based on Larry Williams' "Oops" component). Fourth, the strategy exits at the protective stop, the breakeven stop, the trailing stop, or the Profit Target.

Pair:all;

Time Frame: Daily.

Indicators:

ADX(14) with (D+;D-)

Long and Short Setups

a) If DMIPlus is greater than DMIMinus, ADX is greater than it was on the previous bar, and the open is less than the previous bar's low, you have a setup to buy

b) If DMIPlus is less than DMIMinus, ADX is greater than it was on the previous bar, and the open is greater than the previous bar's high, you have a setup to sell short.

Long and Short Triggers

a) A long position is triggered if prices rise (after the gap-lower open) to the previous bar's low.

b) A short position is triggered if prices fall (after the gap-higher open) to the previous bar's high.

 



Long and Short Orders

a) With a setup to buy in effect, place an order to buy at the previous bar's low on a stop.

b) With a setup to sell short in effect, place an order to sell at the previous bar's high on a stop.

Long and Short Exits

a) Exit a long position at the protective stop, breakeven stop, trailing stop, or Target Profit.

b) Exit a short position at the protective stop, breakeven stop, trailing stop, or Target Profit.

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