Crude OIL GAP setup

Different trading instruments
I got quite a lot of emails yesterday and many of you guys were asking, whether this strategy was also applicable to other trading instruments.

The good news is that the answer is – yes! You can apply this strategy to other trading instruments as well.

Apart from forex, you can also use this one for example on indices like S&P 500, energy like Crude Oil, metals like Gold and other…

I am not that sure about single stocks though. The thing with stocks is that opening gaps are quite normal there. It is not so rare as for example on forex. Those gaps also don’t get filled that often. So I personally don’t trade this strategy on stocks.

Where this strategy really shines, is instruments where initial gaps are not very common.

EXAMPLE #1: Crude Oil
In this example, there is an opening gap from this Monday (27th January). The gap was a smaller one and it was followed by a quick movement down. This movement was a low liquidity move. Very low liquidity – almost a gap!

The gap was there for two whole days and then it got completely filled.

Above the gap, there was a heavy volume cluster (heavy volumes). This volume cluster works as a resistance.

As you can see from the picture below, the price reacted to it, and went downwards.

Happy trading

Dale