Gaps

Price gaps occur when a stock opens the day’s trading session by a price substantially higher or lower than the previous close.

When this occurs and the gap is greater than one trade spread, up or down, an action will occur.

The trade algorithm will react as follows:

Using a cycle going long shares; if the gap up is greater than one trade spread the system will use that execution price as the new base price to calculate the next orders.

If the stock gaps down by more than one point spread, the system will accept the execution price and calculate the next orders based on the original limit order price, not the execution price.

Should the stock price gap down by two or more trade spreads you want to purchase shares at the current market price until the cycle buy limit price is below the gap price. This will keep the cycle intact. This event will trigger a warning to check the gap tab on the trade screeen.

You could also force enter the executed trade at the actual buy limit fill price. Beware that doing this could result in selling shares at a loss as the system is likely now trading below your average cost.