One common day trading strategy is trading opening gaps. Opening gaps occur when a stock opens at a much higher or lower price than the previous day’s close.
This is a common strategy for day trading because you may want to buy and make money on a continuation of that move, or you may want to short the move.
You can easily find opening gaps using three popular tools in Benzinga Pro. Here’s how to get started.
Start with a new workspace and open Movers, Signals and Screener. The tools will be arranged in the order you open them, so be aware of the order you open the tools.
Now, it’s time to set up filters in each of the tools.
Set up Movers for Opening Gaps
Movers is a tool designed to show you the biggest movers of the day. Here’s how to set it up:
- Choose whether you want to see gainers or losers.
- Make sure the right session is selected.
- For the time period, Benzinga’s senior vice president, Steven “BigBeat” Orr, recommends keeping the period to the session, to see how big the gap is for the session.
- You can leave the price and market cap alone, unless you are specific about those things in your trading style.
Save screen space by clicking on the blue filter bar to minimize the filter fields.
Set up Signals
Signals is a tool that alerts you to price and volume-related events in the market. For this particular setup, you’ll want to select the price spike and opening gap Signals.
The opening gaps Signals will show you which stocks gap in the morning, and price spike Signals will alert you to the big movement that happens to those stocks throughout the day.
Setup Screener for Opening Gaps
To set up your opening gap Screener, you first want to add the following columns by clicking the column tab on the right side.
- % from open
- % gap
- Relative volume
- Average Volume: 10 day, 30 day, 60 day, and 90 day.
Now that you’ve added those columns, you can sort how you like. An important note: % gap will show you the gap from the pre-market session, while % from open will only show the gap percentage from open, ignoring what happened in pre-market. You can choose what you’d like, depending on what you’re looking for.
Opening gap strategy is a common day trading strategy that uses a gap in opening price to make big gains. Benzinga Pro helps you find those big gappers with our Movers, Signals and Screener tools.
If you haven’t tried Benzinga Pro yet, start your trial and use it to find opening gaps!