GP3 is a powerful gap trading strategy. When a gap occurs, GP3 checks to see if
it meets our setup conditions. If the conditions are met, we enter the trade and
wait for the market to move in our direction. When our profit objective is reached
or when one of exit conditions is met, GP3 exits the trade. All trades are entered
and exited before market close on the same day. There is no overnight risk using
GP3. GP3 can trade any stock that meets the criteria for day trading. We recommend
trading this strategy fully automated due to the short term nature of each trade.
GP3 is programmed in EasyLanguage and can run on the Tradestation 8.8 or MultiCharts
6.0 trading platform.
Back Testing Results Summary
The GP3 trading system was tested on 33 stocks. Back-testing results were excellent
on majority of the stocks. A few stocks that did not perform well; however, it didn’t
show a significant loss. For trade size, we used 1 share per trade; therefore, the
total net profit can be regarded as the number of points gained during the test
period. To get your actual total net profit, just multiply the total net profit
by your trade size. The same input parameters for each stock we back-tested on.
A $0.01 commission per share was deducted from each trade. From our results, we
are confident that GP3 will continue to perform well in the future and break new
equity high.
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Risk Warning: Trading financial instruments,
including foreign exchange on margin, carries a high level of risk and is not suitable
for all investors. The high degree of leverage can work against you as well as for
you. Before deciding to invest in financial instruments or foreign exchange you
should carefully consider your investment objectives, level of experience, and risk
appetite. The possibility exists that you could sustain a loss of some or all of
your initial investment and therefore you should not invest money that you cannot
afford to lose. You should be aware of all the risks associated with trading and
seek advice from an independent financial advisor if you have any doubts.
