![]() ![]() Practice This Strategy Filling Price Gaps Exhaustion Gaps often occur when traders “buy the rumor, sell the news”, as a majority of the market’s short-term scalpers enter trades and then quickly close their positions for small profits. The implication of an exhaustion price gap is that most buyers/sellers have finished their activities and there aren’t enough orders left in the market to continue the trend. This reversal signal generally has three characteristics: rising volume and a significant upward or downward break in prices. Exhaustion Gaps mark a change from downtrend to uptrend (or vice versa).When prices gap below support levels, trend projections are bearish (and short positions can be established). When prices gap above resistance levels, trend projections are bullish (and long positions can be established). These events usually require above-average trading pressure that suggests market sentiment is changing. Breakaway Gaps occur when market prices gap below support levels or above resistance levels. ![]() Market trades that are based on Continuation Gaps often follow many of the same rules that are used in trend-trading strategies. These gaps signal a rush of sellers or buyers that are now trading with a shared belief in the stock's future direction.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |