Editor’s Note: Our friends at Monument Traders Alliance are holding their next annual War Room Bootcamp event. It’s an in-depth training experience with pro-traders Bryan Bottarelli and Karim Rahemtulla. And they’re inviting our readers to join.
This is your chance to meet with the experts behind the wildly successful War Room and Daily Profits Live communities… get a behind-the-scenes look at their proven moneymaking strategies… enjoy LIVE, face-to-face trading sessions, and much more. Go here for details.
One of the topics they’ll cover during the event is the deceptively simple “Gift Gap” strategy. Scroll down to see it in action…
– Nicole Labra, Senior Managing Editor
The Gift Gap is a powerful strategy that zeroes in on two distinct market inefficiencies…
- Wall Street’s habit of overreacting
- Wall Street’s habit of back-filling those overreactions
Here’s what I mean…
When a stock drops significantly, it creates a “gap” in the chart.
When this happens, I’ve found there’s a high probability that the gap will eventually get filled. That’s our first market inefficiency.
My team and I have put The Gift Gap strategy through rigorous back testing, and the results are nothing short of stunning.
Look at these stats…
- Looking at historical market data from over a 10-year period, we analyzed 3,735 gap down events.
- When targeting a 25% gap fill as our exit, our win rate was a staggering 97.11%.
- That means out of those 3,735 trades, 3,627 were winners.
- The average winning trade lasted just 4 days.
- Even more remarkably, 80% of these winning trades hit our target within the first two days.
Now, to be clear…
We don’t just buy any stock that gaps down.
We wait for our proprietary 10% trigger – when the stock has filled 10% of the gap (the second inefficiency I mentioned before.)
This systematic approach gives us a precise entry point, eliminating guesswork.
Risk management? We’ve got that covered too. Our strategy includes clear exit points, both for taking profits and cutting losses.
Best of all…
The Gift Gap works on both up and down gaps, giving you tremendous flexibility in various market conditions.
As you’ll see, this is a complete trading system…
The combination of a proven market inefficiency, precise entry and exit points, and adaptability to market conditions is what gives The Gift Gap strategy its powerful edge.
The Gift Gap in Action
Here’s a great example in Innovative Industrial Properties (IIPR) from last January.
The stock dropped $18.79, or 16.95%, after its quarterly report didn’t sit well with Wall Street. This created a massive gap from $110 down to $97.50.
I covered this IIPR “Gift Gap” in my Trade of the Day e-letter when this strong trading opportunity presented itself.
What happened from here?
IIPR did exactly what our data tells us is likely to happen…
After an official 10% retracement into the gap – which we had to be patient to see – IIPR started to surge higher and fill the gap.
And as you can see, it not only filled the original gap…
Today the stock trades well above it.
Again, when used properly, the Gift Gap strategy offers a powerful edge in the market.
But to truly capitalize on this edge, you need a solid understanding and disciplined approach.
If you want to learn more LIVE and in-person, Karim and I will be hosting our third annual Monument Traders Alliance Bootcamp on Monday June 16-17 at St. Julien Hotel & Spa in Boulder, Colorado.
Here you’ll get a chance to meet Karim and me in person. You’ll get a behind-the-scenes look at our proven moneymaking strategies and get plenty of ideas and inspiration to elevate your own trading experience.
Go here to lock in your spot right now.
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