 Hello there everyone and welcome. My name is Melissa Armell and I own the Stock Swoosh. And today I wanted to explain to you what is a gap. So this is a question that I often get. And to be honest with you, a lot of people don't know what a gap is. And even people that are familiar with gaps don't understand gaps. So I focus purely 100% on gaps in the market. That's one of the ways that I read the market. When I say the market, I mean the ETF for the SMP. I mean the QQQs, the SPI and then the Dow ETF, which is the diamonds, which is DIA. So I look at these ETFs and I look at charts and I'm looking at the gaps in the charts of the market and also individual stocks. And that's how I read and predict the next direction that the market or stock is going to go. Is it going to go higher or is it going to move lower? So I'm able to predict the directional bias that a stock is going to go or the market based on the gap. So again, what is a gap? A gap is a difference between the close and the open. That's it. So the U.S. market has a close, which is four o'clock Eastern time and it has an open every day, which is 9.30 a.m. So between four o'clock Eastern time and 9.30 in the morning, there's something called the post market and then the pre market, which also the post market has a close ending and the pre market has an open beginning time period. So there are trades. First of all, the U.S. market is not a 24 hour market. So the hours of the markets open officially is 9.30 to four, but then you have trading after hours after four into the night and then you have pre market trading very early in the morning, which sometimes I've seen the market trades go off like around even 4 a.m. When I've had to be up that early for television, I do not normally get up at 4 a.m. But I've seen trades go off and the QQQ's gonna spy that early. Anyways, trading positions are taken in that after hour period and in the pre market morning period. So that is what creates the gap. It could be buying or it could be selling that happens in that period. Now, what do I do? I look at that. I look at the gap and I read it. I read it before the market opens the next day. So you can look at it at night or you could look at the morning or you could look at both before the market opens to see the gap. Now, I get this question a lot as well because I look at bearish caps and bullish caps. Although the main class, the golden gap class, I teach bearish because we're mostly shorting in the trading room. Although I do have a bullish class as well. I just don't do the bullish gap class every month. I do the golden gap course, which is the bearish class I do usually once a month, at least for now. But anyways, I'm looking at bearish gaps and I'm looking at bullish gaps. You need to know that not every gap up or what would be considered a bullish gap, not every gap up can be bought. Just like consequently, not every gap down can be shorted. So that's a very important point because just because something gaps, it doesn't mean you take it number one against the direction of the gap or number two in the direction of the gap. You have to read it and I read the price, the price in the chart to, and I use my rating system to determine and predict the direction that it's going to go after a gap. So I'm not predicting the gap itself, although sometimes I'm able to do that. I usually wait. I'm seeing the gap, the gaps being created and then I rate it using my system again in the pre-market before the open and then I determine, okay, this stock is gapping and it's say, for example, it's gapping up, I'm rating it and I'm seeing that it's gonna fall and sell off or I'm rating it and seeing it's going to rally and get bought. The rating that I get is what determines and tells me the high probability that it's gonna have to have a set direction, whether that direction is like I said, a long or short, okay? But I do prefer looking at bearish gaps and I do prefer looking at shorts in the day trading realm. As far as options go, I can't say I prefer long options or bullish gaps or calls for options, but it seems that I've called way more calls, way more bullish options trades in 2019 than I did a puts or bearish options trades in 2019. That may not be the case in 2020, but I'm just letting you know. So that's what a gap is and that's what I do and that's what I look at and gaps are very important and I think a lot of people use a lot of indicators and charts, they don't help you very often, they hurt you, you're taking away from the information, you're focusing on things that actually take you off of what you should be focusing on, which again is the price action. So I'm focused on the gap, but I focus on reading the price action of that gap. And that's what the meat of potatoes of my class is, the rating system, which I teach you in the class, the things to look for to be able to help you determine that you're gonna trade this gap today, trade the stock today and what direction. Because if you get on the right side of a stock in the momentum when it's moving, that's how you're gonna make money. And really the key to making money in the market is getting momentum right. And right now, recently, the market has been extremely strong. And if you bought the market and belong the market in the last two months, you made money by virtually doing basically nothing at all. Now that's rare, but I'm telling you, I called the gap up in the market as the breakout on November 1st and I was right. And we literally went straight up like this, like a rocket since then. And I've called them bunches and bunches and bunches of calls in the market since then. So it was a great move. The people in the gaps options newsletter captured that move and the people in the day trading room with me captured that move on the days that we were going along the market and specific strong stocks in the market. So it's very helpful to understand gaps. And if you don't know what a gap is and you read stuff online, be careful because there's a lot of information out there that's online or that other educational places teach you about gaps that's wrong. That's one of the reasons that I ended up creating my own system because the information that I found that was out there about gaps was wrong. So there's a lot, a lot of information that is on the internet for free that's incorrect. And then people try to trade it and then they lose money. There's also a lot of educational companies that teach gaps and that information is incorrect too. What do I mean by incorrect? I mean, it does not consistently work consistently to make money over the long haul and in any market environment. And my system does. So I'm lucky, but again, it took me three years plus to figure out how to do what I do. But my system works in any market conditions, bullish or bearish. And also my system has a consistency which means you do the same thing day after day and you're gonna have more winners than losers which is very important by using the reading system because it's about odds. In the market when you're choosing to invest your money or trade or do anything at all when you wanna put money in the market, you have to put the odds in your favor. So 26 things is a lot of things to look at in a daily chart. Yes, that's true, but I can rate it in three to five minutes, less time if I want. If you're new, it might take you 10 minutes but that's still not a long time. So I get up in the morning, I prep, I rate the gaps and again, the high rating, looking at as many things as I possibly can, which to me is 26, tells me and puts the odds in my favor to have a high odds chance of making money on that day, getting the point direction right, getting the stock pick right. So if you have any questions, you'd like to learn my system and my method. The first class for 2020 is January 11th and 12th. 9 a.m. to 5 p.m. Eastern time, email me at melissa at thestockshwish.com. Have a great day.