Gap analysis explained for a beginner

Using Gap we can identify the strength of the market directional movement and it helps us to locate the phase of the trend. It appears due to difference in trading range. Gap trading is a simple and disciplined approach to buying and shorting stocks. Essentially one finds stocks that have a price gap from the previous close and watches the first hour of trading to identify the trading range. Rising above that range signals a buy, and falling below it signals a short.