Gap Up Continuation: how the strategy works
Gap Up Continuation is a price action strategy in the SmartPaperDesk library. See exactly when it enters and exits, and when it tends to struggle.
Price action Intermediate Free plan · हिन्दी में पढ़ें
What it does
It reads daily prices. It enters a position when all of the entry conditions below is true, and it leaves when its exit rule, its stop-loss or its time limit is reached.
Entry rule
All of these must be true on the same day:
- The stock opens more than 2% above the previous close.
- The close is above the 20-day EMA.
Exit rule
It has no exit signal of its own. It leaves on a stop-loss 6% below the entry, or after 20 days at most.
The idea behind it
Price-action rules read the shape of recent candles or the gap at the open, usually together with a trend check.
The bet it makes
It bets that a particular candle pattern or price gap says something about the next move.
When it tends to struggle
Patterns appear often but are small samples, and many are noise. Without a trend or volume check they can trigger on almost anything.
Test it on paper
You can run this strategy on historical, delayed daily data with estimated charges on the free plan. No real money and no real orders are involved.
Questions people ask
Is Gap Up Continuation a buy signal?
No. It is a rule that describes a setup and has to be tested. A rule that fits one period can fail in another, so check it over a long period with costs included.
What does Gap Up Continuation exit on?
It has no exit signal of its own. It leaves on a stop-loss 6% below the entry, or after 20 days at most.
Learn more
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SmartPaperDesk is an educational paper-trading tool. Strategy pages describe a rule only; they show no results and give no advice.
For educational purposes only. This is not investment advice. Past performance does not guarantee future results.