THE GAPS IN TRADING 🧐
I know that you often have the habit of observing empty spaces on your chart. This is what we call << GAP >>
Indeed, there are several that often convey signals that most ignore. I know this is also the case with you (😹😹).
There are thus 3 main ones to know:
•Continuation Gap
it's a Gap that forms in the direction of the previous trend and often indicates a continuation of the past trend
•Breakaway Gap
it's a Gap that goes against the previous trend and often indicates a trend reversal
•Confirmation Gap
it's a "false" breakout Gap that indicates a false reversal signal. These are generally quickly filled and the previous trend continues.
I know you are wondering how to determine whether a formed Gap will be a confirmation or a breakout 🤔.
Well, based on what is said and from my little experience, when you observe a Gap that goes against a given trend accompanied by strong volume, there is a good chance that it is either a << Breakaway Gap >> and that the price will likely pull back above it, or conversely, the price may fail and form a << Confirmation Gap >>.
Were you already aware of this or is it your first time?
Give me your opinion in the comments 💬
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