How to make the gap work for you

Have you considered the trading gap in the shape and chart form of the day? If you haven't already, you've missed some trading opportunities, and if applied correctly, they can make a huge profit. Although there are several strategies for trading day charts and charts, this article will focus on different types of gaps and how to profit from them.

Gap

As we discussed earlier, there are different types of gaps. There will be gaps after the market closes and reopens. A gap will be displayed in your chart. When the market closes on the day before the possible upward trend, the low price at the opening is higher than the high price, and vice versa. The high price at the opening is lower than the low price at the opening. The market close therefore indicates a possible downward trend. These gaps may be caused by overnight economic news, world events or just changes in market sentiment. The greater the gap, the greater the likelihood that the trend will develop. Many traders use gaps as entry points, stop-loss levels or criteria to measure market strength.

Gap type

Common:

Because of the indifference of the market to specific currency pairs, there are no specific reasons for the common gap. These gaps are usually small and should be avoided compared to the gaps caused by major events.

Get rid of:

The market usually has strong levels of support and resistance. In fact, the currency is in the integration phase about 60% of the time, and the trader decides which direction the currency is going to develop. Seasonal trading is a good example of a possible gap. For example, you can develop trading channels throughout the December of the holiday and end the trading channel in January after the holiday, when there may be gaps indicating more market activity and new trends.

Tired:

This happens after a strong currency moves up or down. As the uptrend or downtrend ends and market sentiment changes, there may be a gap indicating that the trend has reversed. When a trader decides to make a profit and exits the position, there is usually a weak gap that effectively depletes the trend and triggers a reversal.

Run away:

These are the opposite of exhaustion. The gap of out of control is essentially a confirmation of development trends. This cannot be confirmed until the subsequent price action confirms that a new trend has emerged and the price continues to move in that direction and the denomination is out of control.

By understanding the different market conditions that can lead to a gap, you can determine whether to trade and profit from it.