Gap - Technical Analysis

Gap Definition

A gap is a break in price with no overlap. Gaps are common in the morning as there is a flood of orders as a result of new releases and earnings reports. Gaps get filled roughly 75% of the time. New traders should go in the direction of the gap, as you can get caught in a trap going counter to the primary trend. Gaps occur frequently in the equities markets, but the chart pattern is rare in the forex market due to its high liquidity and 24-hour trading.

Example of a Gap

Gaps can occur on any time frame. Below is an example of a gap play.

Gap Technical AnalysisGap Technical Analysis

 


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