Gaps represent prices that the market did not trade at. They are pockets of vacuum. For this reason, price gaps captivate traders. Hence, it is not surprising that there are various gap trading strategies. And more importantly, the trading strategy depends on the type of gap. There are four major gap types: Exhaustion Runaway Breakaway […]
The Complete Breakaway Gap Trading Guide
Gaps, or windows, are a vital feature on charts that show up in daily (and above) price charts. These gaping holes in your chart are the result of extreme supply and demand imbalances. And the gap pattern with the best reward-to-risk ratio is the breakaway gap. As a swing trader, you cannot ignore gaps. Gaps […]
Anchor Zones Trading Strategy
L. A. Little wrote two excellent books on trend trading. In his books, he explained a key timing concept called anchor zones, which is a very useful tool for price action traders. In our review, we will find anchor zones and design a trading strategy around them. However, bear in mind that anchor zones are […]
Exhaustion Gap Trading Strategy For Reversals
Imagine waking up to find that your favorite stock has gapped up overnight and given you a windfall profit. Is it time to grab your profits and go? Is it time to reverse your bias and sell short the stock? If the gap is an exhaustion gap, then the answer is probably yes. An exhaustion […]
