The opening gap trading strategy is ideal for automated trading systems as so many factors are known in advance. Our sister company has just produced a video showing their mnGapAutotrader system successfully trading the opening gap with Nasdaq futures.
Opening gap trading strategies are based on trading activities from the close of the market on one day and the open of the market the next. If there has been a lot of trading after hours, due to a news event or company results being published, then the opening gap that is created can present a high probability trading opportunity.
The mnGapAutotrader system is designed to fade the opening gap and is based on the NinjaTrader tradng platform.
You can watch this automated system in action by clicking the image below. Trading Nasdaq futures on 2 November, the system made $275 realised profit in just under 10 minutes.
The video gives a brief introduction to how the mnGapAutotrader works, however it is interesting to see an automated trading system operate without any input from the trader and yet make successful trades.
Trade entries and profit targets are predetermined according to the opening gap size and the system handles order and money management in a completely automated way, as you can see in the video.