2. Good news about stocks is available before the market opens as at times the results are announced on Friday post market hours or on a routine day after market closes.
3. One has to avoid the bull trap where the strategy is to make the stock open at a higher price as compared to its actual gap up opening and innocent investors get trapped considering it as the fair value of the stock.
4. The safe strategy is to wait for the first hour of trading in gap up stoks and let the previous night orders get filled and if still stock is traduing firm, it means that one can make money from such type of a stock.
5. The strategy involves buying when the stock again makes a new high as compared to a high made in first hour of trading. Set an alert for stock as per the Fibonacci series or can set an alert 1/4 point above the high of the day. Now keep watch and if stock is moving in the favourable direction and alert is activated than one can immediately buy the stock and can place stop loss sell order below days low. Key is to trade after first hour and stock should be trading above day high. Loss is limited due to stop loss entered in the system.
