Heh yeah I'm not a massive user of them either, I just see the gaps as an area where the ease of movement is higher; rather than at support or resistance, so whatever direction you are approaching it from momentum is likely to be easier. So it doesn't change the OML chart much to my eyes if at all whether that's a gap or not, can already see its more volatile down there, can already see some support where it is now and where it bounced off the top of the gap before (which looks like it was a good ol fashioned shakeout to sucker those worried about the gap), and that it's potentially dangerous territory if it starts breaking thataway. So they are useful to a point for me, even if only to watvh because you know others are watching them. Some I think base their whole trading strategy around them which is a whole different kettle of fish.
That herd mentality I think is a big thing though. Sometimes it seems like it more of a self-fulfilling prophrecy than anything, things like the 200dma or vwap which can get bounces just because people expect it to. See it often exploited the other way too via shakeouts where someone knows where people are putting their stops around these things (I mean if a peasant such a myself can figure it out, you can bet professional traders are all over where the stops are likely to be, whether they actual stops or mental ones). When so many of us are learning from the same playbooks, it does make us an easy target to exploit and manipulate.
But I think the whole not fighting it is a good one. If it looks like closing a gap, not a bad idea to let it try and jump in later if it holds. I mean the vast majority of TA traders are aware of gap theory to some degree, and when it starts heading off in that direction it can pick up speed rather quickly, whether that's up or down. Not just because there hasn't been a lot of trading at those points, but simply the self-fulfilling prophecy aspect.
, perhaps I could become an author on that site? I'm going to go back to my previous belief of what you called 'the herd mentality' and just take caution when seeing a gap or at least exit before the 'gapped' area is retraced unless in an upward direction.
If I had much lower trade costs I would probably consider making more DT's but out of my experience (and possibly due to my time trading) ST's generally yield a larger profit for myself. Recently I have been sticking to more Mid-Cap stocks and enjoying them although I still get in and out of the Small-Caps. Everyone has to love making quick bucks with little bucks
