GAP is the difference in the trading line which can be indicatd by the candlestick analysis.
The GAP Analysis helps to find out the four characteristics which are Area GAP, Breakout GAP,Runaway GAP,Exhaustive GAP
Area GAP-Area gap is the gap which happens between the demand and supply zone with low volume.
Breakout GAP-Breakout GAP is the GAP which happens at the breakout zone and with the high volume.
Runaway GAP-Runaway GAP is the GAP which haplens after the breakout gap and with the continuance of trading with insignificant volume.
Exhaustive GAP-Exhaustive GAP is the GAP which happen when the opening price of the current day is higher than the previous day’s higher price with the red price at the end of the day(with low volume) in case of Bearish trend
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Hi sir,
This will be the appropriate answer for the question What are the characteristics of exhaustion gap? Highlight why it is difficult to spot?:
Exhaustion Gap
1. The Gap is created at the start of the day i.e. starting price is much higher than the previous day’s highest price but gets filled by end of the day with Red body.
2. Exhaustion gap appears after a significant rally i.e. similar to the runaway gap but it closes with red body
3. volume should be very high to change the trend.
Difficult to spot – Since it starts as a runway gap but later ends as a exhaustion gap, the exhaustion gap is difficult to spot.