Various Market Studies

[Sandy James]

Weekend Gaps in Nifty

Here are couple of scatter maps showing weekend gap points in Nifty.

 

[Sandy James]

Re: Weekend Gaps in Nifty

These are of course based on the absolute value of the difference between Friday's close and Monday's open.

One reason for this study is that I thought there would be huge gaps so I decided to do some tests on Excel and the data shows that these gaps are quite manageable - an open position on weekends won't hurt so much by an adverse open on Monday.

 

[Sandy James]

Re: Weekend Gaps in Nifty

Here's a look at the daily gaps in Nifty. I'm venturing into positional trading and I wanted to know what's in store for me in terms of adverse gap opens.

 

[deba72]

Re: Weekend Gaps in Nifty

Here's a look at the daily gaps in Nifty. I'm venturing into positional trading and I wanted to know what's in store for me in terms of adverse gap opens.

If you have a proper and consistent positional trading strategy, sometimes these gaps will work against you and sometimes they will work for you. On a longer time scale , they should eventually cancel each other out.

But major events ( Brexit etc ) are a different ball game. Personally I feel the best way to play a big event is not to play it at all.

 

[Sandy James]

Re: Weekend Gaps in Nifty

If you have a proper and consistent positional trading strategy, sometimes these gaps will work against you and sometimes they will work for you. On a longer time scale , they should eventually cancel each other out.

But major events ( Brexit etc ) are a different ball game. Personally I feel the best way to play a big event is not to play it at all.

Well said, thanks!

 

[monkeybusiness]

Re: Weekend Gaps in Nifty

Here's a look at the daily gaps in Nifty. I'm venturing into positional trading and I wanted to know what's in store for me in terms of adverse gap opens.

2016 is almost twice more volatile than 2015.
For ex in 2015, 80 point gap was only once in a year, in 6 months of 2016, we already have 2.

 

[Sandy James]

In this thread I will post some market studies which I do every now and then. These are on the Nifty index.

Here is the first one - If the open is inside the previous day's range then where is the close?

Three things can happen here

- Close is above the previous day's high
- Close is below the previous day's low
- Close is again between the previous day's range.

I wanted to check on this and ran some test on the EOD data from 2014 till date. Below is the result:

Out of 364 occasions, 49.7% of the time the close was again within previous day's range!!