Normal gap always fill up.
Gaps generally indicates breakout or breakdowns that happens due to liquidity problems,sudden change in fundamentals or sentiments
(2/n)
Thread ๐งต on Gap Analysis in charts
Have you ever wondered what causes gaps in price charts and what they mean?
Well ,you have come to the right place
Gap is an area in chart where no trade took place and this happens between close of a market and next days opening ๐
(1/n)
Normal gap always fill up.
Gaps generally indicates breakout or breakdowns that happens due to liquidity problems,sudden change in fundamentals or sentiments
(2/n)
Before we get into different types of gap formation here is a chart showing a gap so that you may know what we are talking about
A gap is formed during uptrend(price moving up)
(3/n)
This are common and may happen regularly in smaller timeframes
(4/n)
1)Common Gap
2)Breakaway Gap
3)Runaway Gap
4)Exhaustion Gap
We will understand each gap deeply why it is formed and the psychology behind each
Here is a chart showing all the 4 gaps together
(5/n)
This gaps are also referred to as trading gap and are really uneventful which naturally happens everyday so its common.
Congestion area create this gaps and notice after gap up generally price moves to beginning of the gap.
(6/n)
Here is a chart showing common gap that is filled in next 2 days
Next gaps are actually interesting ๐
(7/n)
This gaps are formed when price is breaking any trading range for example major support or resistance area in congestion area
A congestion area is just a price range where the market has traded for some period of time or weeks.
Check this chart
(8/n)
Volume should pick up significantly,for not only increased enthusiasm but people sitting on wrong side to cover position
(9/n)
Sometimes it may take 2-3 years to fill this gap(noticed in few stocks)
(10/n)
They are also called measuring gaps and are best described as gaps that are caused by increased interest in the stock
This gaps are created in almost panic or satisfaction scenarios where volume comes during and after the gap
(11/n)
News based action make this gaps generally(govt policy changes,results,etc)
(12/n)
This chart is showing a runaway gap with huge volume
(13/n)
This gaps are created near any major top or bottom basically near the end of any major up or downtrend
A pattern is formed after this gap that reverses the trend with huge volume and also marks the end of previous trend
(14/n)
This gap are filled easily as price reverse their trend
Volume increases more after breakdown or breakout
In the chart notice there was one more day of trading after which stock plunged down
(15/n)
More from All
You May Also Like
1/โWhat would need to be true for you toโฆ.Xโ
Why is this the most powerful question you can ask when attempting to reach an agreement with another human being or organization?
A thread, co-written by @deanmbrody:
2/ First, โXโ could be lots of things. Examples: What would need to be true for you to
- โFeel it's in our best interest for me to be CMO"
- โFeel that weโre in a good place as a companyโ
- โFeel that weโre on the same pageโ
- โFeel that we both got what we wanted from this deal
3/ Normally, we arenโt that direct. Example from startup/VC land:
Founders leave VC meetings thinking that every VC will invest, but they rarely do.
Worse over, the founders donโt know what they need to do in order to be fundable.
4/ So why should you ask the magic Q?
To get clarity.
You want to know where you stand, and what it takes to get what you want in a way that also gets them what they want.
It also holds them (mentally) accountable once the thing they need becomes true.
5/ Staying in the context of soliciting investors, the question is โwhat would need to be true for you to want to invest (or partner with us on this journey, etc)?โ
Multiple responses to this question are likely to deliver a positive result.
Why is this the most powerful question you can ask when attempting to reach an agreement with another human being or organization?
A thread, co-written by @deanmbrody:
Next level tactic when closing a sale, candidate, or investment:
— Erik Torenberg (@eriktorenberg) February 27, 2018
Ask: \u201cWhat needs to be true for you to be all in?\u201d
You'll usually get an explicit answer that you might not get otherwise. It also holds them accountable once the thing they need becomes true.
2/ First, โXโ could be lots of things. Examples: What would need to be true for you to
- โFeel it's in our best interest for me to be CMO"
- โFeel that weโre in a good place as a companyโ
- โFeel that weโre on the same pageโ
- โFeel that we both got what we wanted from this deal
3/ Normally, we arenโt that direct. Example from startup/VC land:
Founders leave VC meetings thinking that every VC will invest, but they rarely do.
Worse over, the founders donโt know what they need to do in order to be fundable.
4/ So why should you ask the magic Q?
To get clarity.
You want to know where you stand, and what it takes to get what you want in a way that also gets them what they want.
It also holds them (mentally) accountable once the thing they need becomes true.
5/ Staying in the context of soliciting investors, the question is โwhat would need to be true for you to want to invest (or partner with us on this journey, etc)?โ
Multiple responses to this question are likely to deliver a positive result.
