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 are 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 Analysis