A Simple Approach To Gap Trading by Solomon Chuama
Anyone who has looked at a price chart knows that gaps occur. But all gaps aren’t the same. Here’s a look at the characteristics of four and how you can trade them.
Gaps—the spaces between price bars—are common on forex charts. These visible gaps often occur on the charts between the close of forex trading on Friday afternoon and the opening on Sunday afternoon. Sometimes you’ll see gaps appear in equity or index charts when a news report is released. Your ability to trade a gap depends on your identifying the type of gap that forms and the price action that follows. That said, let’s look more closely at gaps ...