Gap-and-Go vs Gap-and-Crap — Decision Tree

[NYC88]

Gaps are not setups. Gaps are **conditions**.

Took me longer than it should have to internalize that. Gap-up used to mean "I have to be involved." Usually meant I had to be involved on the wrong side of the spread.

### Quick tree (what I run through)

Code: Select all

Gap up + rising PM volume + clean catalyst
  → candidate for continuation IF open holds PM support / OR break
Gap up + fading PM volume + recycled headline
  → fade candidate only if YOUR fade playbook exists (else skip)
Gap down + panic headline + climactic volume
  → not an automatic long; wait for reclaim structure
Gap into earnings print
  → binary: size down or flat

### "Go" tells (none sufficient alone)

Premarket higher lows into the bell. Spot bids defending a level on L2 (with salt). Index not dying under the name. Spread still tradeable. That's the boring list. Boring is good.

### "Crap" tells

Vertical PM spike, no consolidation, chat euphoria. Offering rumor mid-spike. Wide spread that only "looks tight" on a 5-min chart. You needed the gap to "make back yesterday" — that last one is personal. I've been that guy.

### Personal rule

If I can't state the **invalidation** in one sentence before entry, it's gap-and-crap for me — even if it runs without me. Missing a runner beats inventing a plan mid-fill.

How do you define invalidation on a gap-and-go before you click?
Fade gaps at all, or is that a hard skip in your book?
What PM volume behavior is your strongest "go" tell?
Anyone have a gap rule that saved them this week — specifics welcome?

[Fairman]

Gaps are conditions. That sentence alone would have saved me a year of forcing involvement.

Your tree is what I run, with one stocks-specific hardening:

Gap up + rising PM volume + clean catalyst → continuation candidate only if open holds PM support or a defined OR break with volume. Otherwise it's a watch, not a must-trade.

Gap up + fading PM volume + recycled headline → fade only if a fade playbook exists with invalidation. Else skip. Skipping is a position.

Gap down + panic headline + climactic volume → not an automatic long. Wait for reclaim structure you can write down.

Gap into earnings print → binary: size down or flat. No "I'll just scalp the open" without acknowledging the binary.

I add a hard gate at 09:20 ET: continue / fade / skip must be filled. Blank field = improvisation = donation risk on US equities when the spread is already taxing you.

Diagram: condition tree with the three common branches.