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"I think a lot of people are confused about the gap theory. I am not trying to diss anybody, but...."

Over the past several months I noticed an undue amount of discussion on this board concerning gap plays, mostly by relative newcomers to short term trading. As is often the case for newcomers to any profession, new traders also try to use the experience of more seasoned traders as a crutch or shortcut to success. Soon enough, though, they find that marching to someone else's drum gets them out of step with the parade, then they stumble, and wonder why.

Theories created from one's own experience work because they evolve as a result of thoughtful and disciplined experimentation. Theories put into practice by thoughtless imitation simply don't -- there is no such thing as a free lunch.

Janny studied gap behavior over many months before she noticed certain patterns emerge. These patterns did not uniformly appear among all stocks that have gapped up or down -- some of them exhibited behavior contrary to others. But enough of them conformed to the pattern to warrant further study. She brought her observations to the board's attention as a basis for embarking on our own studies, and decide whether our individual findings warranted putting them to use -- she neither guaranteed nor implied that the theory was failsafe.

Jessie Livermore, arguably the most successful trader of all time, also developed a method of trading to which he adhered religiously, and still, some of his trades were losers.

To make a long post short, (although it might be too late for that) the key to successful trading is not finding a system that worked for someone else, but developing your own through due diligence.

Again, there is no such thing as a free lunch.

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