Gap Trader

Over the years CK Locke and Partners have backtested and applied many systems to suit different markets and situations and have developed a day trading application (Gap Trader) that can be traded on the SPI 200 Futures Contract and is suited to a volatile trading environment.

Rather than trading each day, the Gap Trader waits for the market to be in the correct setup before entering any trades and always uses Stop Loss orders to protect the position when trading. 

Trading signals are generated by a percentage rise or fall from the opening stock index futures price in relation to the previous days closing price. Hence the application is designed to potentially exploit market inefficiencies that exist when stock index futures prices gap up or down too far.
When a sufficient gap exists, the strategy generates an order to "buy" when the SPI gaps down or "sell" when the market gaps up, hence the direction of the trade is in the opposite direction of the respective gap.

The strategy facilitates efficient money management because positions are opened and closed during the one session, eliminating any potential overnight risk.

Entry criteria is fully mechanical, hence eliminating subjectivity and/or procrastination.