Trading Breakaway Gaps by Pawel Kosinski
Many traders like to trade breakaway gaps. How effective are they? Here, we look at backtesting results of trading different breakaway gaps to determine if they can be profitable.
Gaps occur on a price chart because of some impetus that made the price move higher or lower than the previous day’s closing price. Several types of gaps are possible and in this article I’ll focus on upward breakaway gaps, which occur when price suddenly jumps from a congestion zone and moves up. It is considered to be a bullish action and something traders are familiar with ...