📊 Gap Trading Series — Part 2: Types of Gaps 🚀
Not all gaps are the same…
Understanding the type of gap helps traders identify market strength, weakness, and potential opportunities. 📈
There are 4 Main Types of Gaps: 👇
🟢 1. Common Gap
• Happens frequently
• Usually gets filled quickly
• Less significant for trading decisions
• Often appears in sideways markets
🔵 2. Breakaway Gap
• Signals the beginning of a new trend
• Comes with strong volume
• Shows strong buyer/seller conviction
• Often remains unfilled
🟠 3. Continuation Gap
• Appears in the middle of a trend
• Shows trend strength
• Also called a “Runaway Gap”
• Suggests the current trend may continue
🟣 4. Exhaustion Gap
• Occurs near the end of a trend
• Often comes with high volume
• Shows weakening momentum
• Can signal a possible reversal
🔥 A professional trader doesn’t just see a gap…
They understand what type of gap it is and what story the market is telling. 📚
Gap Trading Series — Part 2/4
#GapTrading #TechnicalAnalysis #PriceAction #TradingEducation #StockMarket #Nifty #ElliottWave #TradingStrategy 📈🚀
Key time for 4H CRT:
- 1am forms → 3am purges
- 5am forms → 6am purges
- 9am forms → 9am purges
Notice the pattern?
The purge almost always lands in Q2 of the 4H candle,
that's your highest probability window to validate a CRT.