Types of Gap Trading Strategies
1. Breakaway Gaps
2. Runaway Gaps
3. Exhaustion Gaps
1. Breakaway Gaps
2. Runaway Gaps
3. Exhaustion Gaps
1. Breakaway Gaps
This is when we break important support, resistance, or trend line levels with a gap.
They generally appear after patterns like a consolidation range or continuation/reversal patterns.
This is when we break important support, resistance, or trend line levels with a gap.
They generally appear after patterns like a consolidation range or continuation/reversal patterns.
2. Runaway Gaps
If you have a move that is already in progress and possibly somewhere in the middle of the move, a gap may occur.
This is a runaway gap.
We can get a continuation in both an uptrend and downtrend gap.
If you have a move that is already in progress and possibly somewhere in the middle of the move, a gap may occur.
This is a runaway gap.
We can get a continuation in both an uptrend and downtrend gap.
3. Exhaustion Gaps
These tend to be weak gap ups at resistance or gap downs to support.
This price action is meant to trap buyers.
They also tend to occur with extremely high volume.
These tend to be weak gap ups at resistance or gap downs to support.
This price action is meant to trap buyers.
They also tend to occur with extremely high volume.
$ENPH is a great example of a breakaway gap.
#BreakawayGap
#BreakawayGap
$ENPH After its breakaway gap, we now have put in a runaway gap.
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