11/30/2022 0 Comments Fill the gap stock![]() ![]() Breakaway Gaps - This type usually occurs after a consolidation or some other price pattern.It isn't really necessary to memorize all of these patterns but here is the breakdown so that you can impress your trading friends. Traders have labeled gaps depending on where it shows up on a chart. So I really don't even think it is worth debating because it offer no edge one way or another! Types of gaps Some gaps never get filled, and sometimes it can take years to fill a gap. Sometimes you will hear traders saying that "gaps always get filled". A few days later it rallied back up and filled in the price level at which there were previously no trades. In this example, you can see that the stock gapped down. ![]() They are talking about a stock that has traded at the price level of a previous gap. When we say that a stock is "filling a gap", the Japanese would say that the stock is "closing the window". In Japanese Candlestick Charting gaps are referred to as windows. Sometimes you will hear traders say that a stock is "filling a gap" or they might say that a stock has "a gap to fill".Īre you wondering what the heck they are talking about? You can see on the chart above that the stock closed at one price and then the next day the stock "gapped up" creating a price void on the chart (yellow circle). Since there were no trades between $26.57 and $27.60 this will create a gap on the chart. They report higher than expect earnings that causes excitement among investors. After the close they come out with their earnings report. Let's say that on Tuesday, Microsoft closes at $26.57. Why would this happen? This happens because buy or sell orders are placed before the open that cause the price to open higher or lower than the previous day's close. These can occur in all time frames but, for swing trading, we are mostly concerned with the daily chart.Ī gap on a daily chart happens when the stock closes at one price but opens the following day at a different price. What is a gap?Ī gap is defined as a price level on a chart where no trading occurred. #Fill the gap stock professional#You have to be able to identify if the gap is caused by professional traders or amateur traders. ![]() There are really only two significant factors to consider when trading gaps. ![]()
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