What's up, everyone.
One thing that still gets me from time to time is dealing with market gaps. You wake up Monday morning, or the NYSE opens, and the price is completely different from where it closed. It’s jarring, and if you’re not prepared, it can destroy your trade.
I found this neat little infographic that breaks down the main "Gap Patterns to Know" into nine simple charts. It’s clean, easy to read, and covers all the major types I look out for.
Think of it as a quick reference card. It doesn’t explain every single detail of why the gap happens, but it does a fantastic job of showing you the consequence of each type and the kind of follow-through you can expect (or look for a reversal on).
I’ve saved this image to my own reference folder, and I wanted to share it with you all, too.
My Personal Tips for New Traders Looking at This:
Wait for the Close: The gap itself is interesting, but what matters is how the next few candles react. For instance, the 'Gap Filled' pattern is super common, so don't just blindly trade in the direction of the gap. Wait for confirmations.
Context Matters: A gap into a major support or resistance level (like the supply/demand zones shown in the top two patterns) is much more significant than a random gap mid-trend.
Keep it Simple: Don't try to memorise all nine at once. Just keep this image handy, and when you see a gap, pull it up and see which pattern it looks like.
Anyway, hope this is helpful for your own technical analysis. Remember, no chart pattern is a guarantee, but having a better understanding of how the market reacts to gaps will definitely improve your trading.
Stay smart and good luck this week.
What's up, everyone.
One thing that still gets me from time to time is dealing with market gaps. You wake up Monday morning, or the NYSE opens, and the price is completely different from where it closed. It’s jarring, and if you’re not prepared, it can destroy your trade.
I found this neat little infographic that breaks down the main "Gap Patterns to Know" into nine simple charts. It’s clean, easy to read, and covers all the major types I look out for.
Think of it as a quick reference card. It doesn’t explain every single detail of why the gap happens, but it does a fantastic job of showing you the consequence of each type and the kind of follow-through you can expect (or look for a reversal on).
I’ve saved this image to my own reference folder, and I wanted to share it with you all, too.
My Personal Tips for New Traders Looking at This:
Wait for the Close: The gap itself is interesting, but what matters is how the next few candles react. For instance, the 'Gap Filled' pattern is super common, so don't just blindly trade in the direction of the gap. Wait for confirmations.
Context Matters: A gap into a major support or resistance level (like the supply/demand zones shown in the top two patterns) is much more significant than a random gap mid-trend.
Keep it Simple: Don't try to memorise all nine at once. Just keep this image handy, and when you see a gap, pull it up and see which pattern it looks like.
Anyway, hope this is helpful for your own technical analysis. Remember, no chart pattern is a guarantee, but having a better understanding of how the market reacts to gaps will definitely improve your trading.
Stay smart and good luck this week.
