moonchild
VIP Contributor
Gaps basically are space in the charts where no trading activity is being done, there are different types of gaps and we'll look over them in this very short article, Gaps tend to occur in a volatile pair, you don't expect a gap in a slow pair because it isn't liquid enough, but pairs like GU or EU or XU, they tend to gap a lot due to their daily range and how they move sporadically from time to time.
There are gaps on Market Close, these gaps happen after a trend day and when when market is about to close, and they are mostly filled the following day.
We also have a Exhaustion Gap, this type of Gap happens when a market has trended for a long time uptrend or downtrend doesn't matter, but after a significant move market gaps up, the gaps mostly get filled within 48 hours.
You can make money trading gaps by using them as a hot support or resistance area, draw out your lines and wait for market to get there, put your stop loss it or above depending on the market trend and then execute, also beware of fakeouts when trading gaps in the market.
There are gaps on Market Close, these gaps happen after a trend day and when when market is about to close, and they are mostly filled the following day.
We also have a Exhaustion Gap, this type of Gap happens when a market has trended for a long time uptrend or downtrend doesn't matter, but after a significant move market gaps up, the gaps mostly get filled within 48 hours.
You can make money trading gaps by using them as a hot support or resistance area, draw out your lines and wait for market to get there, put your stop loss it or above depending on the market trend and then execute, also beware of fakeouts when trading gaps in the market.
