1.0 What is “Gap”?
A “gap” is a break that appears on chart between the prices that occurs when the price changes instantly towards up or down without having a trade between. Factors that can create gaps might be pressure on buying or selling, announcements about earning or a change in an outlook given by an analyst or other sorts of news.
The usual thought about the forex is that it is totally closed for the weekends, but that is only true to some extent. For the retails traders, it is closed, but for the central banks and organizations that are related to it, it is actually open 24/7. Transactions at the forex are always on, and they are being conducted electronically, so they can never be stopped. Since this kind of work is always going on, the prices are always changing – due to supply and demand, as somebody is always buying and somebody is always selling.
In article Trend Trading Strategy: Departure Trendline Setup we can see excellent chapter about gaps. There is table in this article where we can see 4 types of gaps. Runaway gap and Breakaway gap are gaps in strong market trend ( "no fill" gaps).
1.1 Runaway Gap
Figure 1: Continuation Gap or Measuring Gap or Runaw
Read article
Translate to English Show original