Introduction
The secret to Ben Hardesty’s trading success lies in his disciplined gap and crap shorting approach for small cap markets. This data-driven strategy has produced consistent short-term profits while maintaining strict 25% risk limits per position.
Trader Talks QnA
How did you develop this gap and crap shorting strategy?
“I spent the first 3-4 hours trading, then 8 hours collecting data. By analyzing all my trades in Google Sheets, I discovered that 25% risk worked better than my original 10%. The data showed 1R trades (risk-to-reward) with 60-70% win rate outperformed bigger swings. That’s when my million-dollar profits through gap shorting really took off.”
What specific criteria do you look for in gapping stocks?
“I focus on three key metrics: Minimum 25% gap up, price range between $0.50-$10, and volume above 250,000 shares. Small cap stocks below $1 historically work best for my short strategy.”
How do you handle position sizing and entry timing?
“I break positions in halves with confirmation-based entries. If a stock gaps up with high volume pre-market, I’ll take one half immediately while watching for technical confirmations like support level breaks. I’ll add the second half if technical conditions support it before 9:30 AM market open.”
What differentiates your approach from typical 2:1 ratio traders?
“My data showed 1R targets work better for me. With my 60-70% win rate, one R trades (25% account movement per position) generate consistent profits. While others chase 2:1, my spreadsheet analysis showed better results from focusing on 1R.”
What mistakes should traders avoid in this strategy?
“Don’t force entries after partial fills. If only one half fills, don’t chase. Don’t base decisions on price action alone. Always set hard stops to prevent 2R+ losses. And don’t short small caps without proper research – I analyze 3-4 days of chart patterns before trading them.”
Key Trading Insights from Ben Hardesty
Ben Hardesty’s success demonstrates the power of specialization in day trading. His gap and crap shorting strategy focuses on precise data points while maintaining emotional discipline through hard stop orders and structured position sizing. Let’s break down his actionable approach:
- Only trade small caps (<$10) showing 25%+ gaps with substantial premarket volume
- Use 25% risk parameters based on extensive backtesting of past trades
- Split positions into two halves with different entry points for risk mitigation
- Implement hard stops immediately at entry points instead of mental stops
- Fully exit positions at 1R target rather than waiting for bigger gains
- Invest 8 hours daily into data analysis using Google Sheets alongside trading time
- Maintain consistency through losing streaks by following data-driven systems
Ben Hardesty Strategy
Ben’s methodology combines technical pattern recognition with strict risk parameters. His gap and crap shorting strategy systematically identifies volatile small-cap movers then times entries during pre-market hours.
High-Probability Pattern Recognition
He watches stocks that gapped at least 25% from previous close while trading below $10. The strategy requires confirmation that price won’t retest premarket highs before entering shorts at resistance levels.
Dynamic Position Sizing
By splitting positions into halves with confirmation entries, Ben ensures partial fills don’t trigger emotional bias. He adds to positions when technical levels break premarket while maintaining consistent 25% risk per full position.
Ben Hardesty Tools
Ben utilizes simple but effective tools to execute his day trading strategy, focusing on systems that support disciplined gap market participation and risk management:
- Weeble platform for premarket volume tracking and gap stock identification
- Cobra Trading as preferred broker for fast execution and short locate availability
- Google Sheets for comprehensive data collection and position sizing analysis
- Mobile trading platform (unnamed) for all trading activity execution
Common Trading Mistakes to Avoid
According to Ben, three major mistakes sabotage most gap traders:
- Emotional trade management instead of data-driven decision making
- Chasing partial entry fills that lead to shorting the bottoms
- Moving stop loss points after entries based on market noise rather than original strategy
Conclusion
Ben Hardesty’s journey from small cap trading to making millions short demonstrates the power of pattern specialization with emotional discipline. His approach proves that simple tools like Google Sheets and a mobile platform can deliver exceptional small cap trading returns when combined with gap and crap analysis and strict position sizing rules. For traders seeking similar profits through short-term stock trading, remember to: 1) Focus on consistent 1R trades, 2) Backtest all decisions with spreadsheet analysis, 3) Protect against significant losses using hard stops, 4) Specialize in markets matching your trading psychology (micro caps in his case). Interested in gap market strategies? Share your key takeaway or join Ben’s discussions in the be the trader Discord community to deepen your data-driven trading knowledge.