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These are fantastic trades but they must be selected carefully.  A fast move into the level inside my Neutral Zone is a perfect setup but a fast move into the level, when price has just broken out of my Neutral Zone is likely to be a disaster.

Examples of trades that worked

Gap fill inside the Neutral Zone and at confluence with a TL and pivot – perfect setup and hard to take because the speed of the move into it.
Here’s another similar set up at the futures open.
This one shows a fade of the ex-gap (high) – and it shows that the market will often go back and retest the level.

And one that didn’t

There is barely a pause in declines when the market hits the ex-gap and gap close – reaction is just an un-tradeable 6 or 7 pts.

So what’s the difference between this one and the winners? The answer lies in PA context; if the market is seeing an impulsive move having just broken a Kl or TL, it is in steam train mode and we don’t trade against it. Sometimes the market will break the level, then see a fast move that quickly fizzles out. This tells you that there were lots of stops at the level but not much interest in opening new positions on the break. If this happens, the gap or ex-gap fade can setup very nicely.

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