June 2012
Intermediate to advanced
256 pages
3h 29m
English
book
Technical Analysis of Gaps: Identifying Profitable Gaps for Trading
by Julie R. Dahlquist, Richard J. Bauer
Content preview from Technical Analysis of Gaps: Identifying Profitable Gaps for TradingBecome an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
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Chapter 9. Closing the Gap
The gap must be closed” is an often-heard saying among traders. This saying, however, seems to be based on lore rather than on hard evidence. The idea is that a gap creates a void in the price on a stock chart, and there is a natural tendency for market participants to want to “fill the gap” so that no visual void appears on the chart. Even those who claim that a gap must be closed differ widely in their interpretations. Some think that the gap will close quickly, within a few trading days; others talk about this occurring over a much longer time period, perhaps even years.
The criterion used throughout this book to define a gap is that one day’s price action lies totally out of the range of the previous day’s price ...
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I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.