A price gap is a recurring event in the financial markets that can occur for a variety of reasons. Let’s take a look at what a Gap is and look at the types of price gaps in the stock market and Forex.
The price gap is simply a range chart in which no trade has been made. In the uptrend, for example, the opening of a price higher than the previous day’s high price creates a gap or Gap or play space that is not filled during the day.
Labels: Order to build a Forex robot , Build a stock trading robot , Build a trading robot , Trader robot design , Free Forex Robot , Forex robot programming , Forex Expert Making Tutorial , Build a trading robot with Python , Download Forex Trading Robot , Buy Forex Trader Robot , Automated Forex Robot , Free stock trading robot , Learn how to build a Forex trading robot , Alpari trading robot , Forex robot for Android , MetaTrader robot design , MetaTrader robot programming , Forex robot design , Forex robot programming , Automated trading
In the downtrend, the highest price of the day is less than the low price of the previous day and forms a gap. The gaps in the uptrend are a sign of the strength of the trend and in the downtrend is a sign of the weakness of the trend. Gaps also occur in long-term weekly and monthly charts, and their occurrence is considered an important event. But gaps often occur in daily charts.
There are several terms used to describe price Gaps , one of the most common of which is “gaps are always filled.” However, this statement is not always true. Some are filled and some are not. In the following we will see that Gaps give us different predictions depending on what kind of them and where they happen.
Types of price Gap
There are three types of Gap in financial markets:
- The Gap failed
- Gap escape
- Fatigue Gap
The Gap failed
Failure Gap usually occurs at the end of price patterns and often warns of the beginning of a significant price movement. After a major pattern is formed in the market, resistance line failures often occur in the breakout area.
Significant failures in the roof area or pattern resistances underlie the gap. Definitive failure of an important trend line as a trend reversal warning can be seen as a failure gap.
Failure gaps are usually associated with heavy trading volume. Failure Gap is not usually filled. The price may return to the top of the gap (in incremental gaps) and may fill part of the gap but not part of the gap. In a general rule, when a gap is associated with heavy trading volume, it is less likely to be filled.
Gap escape
Sometimes, after a period of movement, the price jumps up around the middle of the movement and forms another type of gap called escape gap. This type of Gap reveals a market range in which the price moves slowly and with normal trading volume.
In the upward trend of this type of Gap , it is a sign of price strengthening and in the downward trend, it is a sign of price weakening. Here, too, the escape gap acts as a support line in the next price correction and is often not filled. By measuring the distance of the trend from the starting point of the trend to this point, it is possible to estimate the distance remaining until the end of the trend.
Fatigue Gap
The last type of Gap is the fatigue Gap that appears at the end of the price movement. Once all the goals have been achieved and the two gaps of failure and escape during the process have been identified, the analyst should expect the fatigue gap to occur. Near the end of the uptrend, the price makes a last-ditch effort to continue the uptrend. Of course, this uptrend is very unstable and the price will decrease over the next two days or a week.
When the price closes below the fatigue gap, it should be considered as a sign of the end of the trend life. This is an example of a sharp drop following the price falling below the gap.
Golden tip!
Finally, it is important to note that most Forex brokers do not necessarily honestly show you the correct candlesticks, so it may not be easy to figure out which type of Gap we are talking about in this article! We recommend that you invest in one of the forex brokers, Hot Forex or Alpari, so that in addition to receiving the appropriate trading services, you can receive chart information with confidence in MetaTrader and easily analyze and trade.
Labels: Order to build a Forex robot , Build a stock trading robot , Build a trading robot , Trader robot design , Free Forex Robot , Forex robot programming , Forex Expert Making Tutorial , Build a trading robot with Python , Download Forex Trading Robot , Buy Forex Trader Robot , Automated Forex Robot , Free stock trading robot , Learn how to build a Forex trading robot , Alpari trading robot , Forex robot for Android , MetaTrader robot design , MetaTrader robot programming , Forex robot design , Forex robot programming , Automated trading
