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The four types of GAP are:
1. Area GAP – Appears inside the trading range.
2. Breakout GAP – Appears while break out.
3. Runaway GAP – May appear after break out.
4. Exhaustion GAP – May appear after a significant rally and terminating existing trend.
The long gap between the previous day’s highest price,and the lowest day’s price go out of the range,there forms a gap which known as the gap.The four type of gap as: – area gap, break out gap , run away gap, and exhaustion gap.
Four types of gap are
Area gap- if it occurs inside the trading range
Breakout gap- occurs while breakout
runaway gap- post breakout can appear
Exhaustion gap: may appear after significant rally and terminate the existing trend
The four types of GAP are:
1. Area GAP – Appears inside the trading range.
2. Breakout GAP – Appears while break out.
3. Runaway GAP – May appear after break out.
4. Exhaustion GAP – May appear after a significant rally and terminating existing trend.
GAP are named depending upon its appearance i.e. within trending or non trending zone.
Area Gap- GAP which occurs within the non trading zone, not much of significance for trading
Break Out Gap- GAP which occurs while moving out of the non trading range, volume should be high while breaking out. Its start of bullish trend
Runway Gap- It may appears after breakout where sellers are few in number while buyers are more. Here the sellers become buyers hence their is sudden rise in prize leading to gap formation. Volume wont play major role.
Exhaustion Gap- Appears after trending zone. Where the day opening is high compared to previous day and the same gap get filled back by end of the day is know and exhaustion gap
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