Open GAPs theory

[Tobi]

Breakaway or breakout Gaps.
The most profitable gaps are those that occur at the beginning of a trend, also heavy volume usually accompanies upward
but not necessary downward gaps.
The best is to wait if the gap is filled and if don't place an entry with the direction of the gap with the stop at the point where the
gap could be filled.

Opening Gaps.
When the opening price for the day is outside the range of the previous day, it is called an opening gap.
After the opening, prices might continue in the direction of the gap and it becomes a breakaway gap.
the next possibility prices might retrace from the opening and fill the gap.

Runaway Gaps.
Gaps that occur along a trend are called runaway gaps.
They can appear in strong trends that have very few minor corrections and just keep rising or declining without retracements
or other interruptions.
They are also called measuring gaps because, like pennants and flags, they often occur at about the middle of a price run.

 

[gwolf666]

Breakaway or breakout gaps usually appear at the start of a new trend and can be very profitable, often with strong volume on upward moves. Traders often wait to see if the gap gets filled before entering in the same direction, with a stop placed near the fill point. Opening gaps occur when the day’s price opens outside the previous day’s range, and they can either turn into breakaway gaps or get filled quickly. Runaway gaps appear in the middle of strong trends with little retracement, acting as measuring gaps that indicate the trend still has room to continue.