Review. What is a Gap, and How Does it Affect trading?

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The review says that there are quite a few strategies for trading, but one of the most interesting is the use of gaps. Let’s see what it is, how it works, and how you can make money on it.

What is GAP?

All data on changes in the currency’s value is recorded automatically on the chart. When there is a substantial jump in weight, this chart breaks. This manifests itself in the fact that the price of an asset moves sharply up or down without any intermediate values, which means that the market opened at a price different from the previous closing price. It is called a gap.

Most gaps are for fundamental reasons. For example, a company has reached some new heights in its development or has lost a substantial investor. An experienced trader on knows well how to learn how to make money on such sharp jumps in asset values.

bbanc homepage screenshot
Screenshot of Bbanc’s homepage

Types of gaps review says that there are several varieties of gaps. There are currently 4 main types:

  • Common;
  • Breakway;
  • Continuation or runaway;
  • Exhaustion.

Regular gaps show a sharp price change and usually do not provide exciting trading opportunities.

The breakway gap indicates a fundamental change in the value of assets, which will be observed for a long time and can significantly affect the company’s trading opportunities.

If the company showed rapid growth earlier, there was a gap, and the value of the shares began to grow even faster, then this phenomenon is called continuation or runaway gap.

If earlier the value of the shares grew slowly, then there was a gap upwards, but after a short period, the value of the beginning quickly tends to decrease, then this phenomenon is called the exhaustion gap.

Each of these gaps has its characteristics, so the strategy must be selected depending on the circumstances in which you are. The exact process will not work for different kinds of gaps. It must be taken into account when bidding on to avoid problems.

Gap Trading Strategies and Tips

As already mentioned, offers several strategies for trading with the gap. Each of them has its fundamental features.

Gap damping

After a gap occurs, it attracts a lot of attention from traders. If they find any problems, they have many questions, and they begin to withdraw money actively and resell assets.

It leads them to fill this gap within a few hours. So, by the end of the day, the value of the shares becomes the same as it was the day before.

The rational exuberance of less experienced traders can be especially beneficial for more experienced marketers when narrowing the gap in the volume that causes the gap.

The review says that making money on this type of gap is quite tricky.

Gap prediction

If users can predict the gap, you can make massive money on So, if you notice fundamental events that can lead to a sharp jump in value, it makes sense to open a new position in a day. Having detailed information about a given company and its operations can help a trader predict a gap for that stock ahead of the earnings report.

Using indicators

Traders can use exponential moving averages and RSI tools to identify key price points and inform their decisions. Information received on time allows you to identify critical issues that can identify risk free assets, catch the prerequisites for a gap, and identify potential loss.

Key points to consider

When trading on, there are several points that you need to pay attention to when working with gap:

  • Classification gaps;
  • If the gap starts to fill up, then it is unlikely that you will be able to make money on it;
  • Pay attention to gap volumes;
  • Be careful.

The review says that there is a scam in the cryptocurrency markets. We can observe situations where such jumps are created artificially. In this case, we usually see an Exhaustion gap. If most holders understand that it was manipulative, they stop participating in the auction. In the future, such coins withdraw liquidity and ultimately leave the market. If you try to make money on this kind of racing, you will most likely lose.

The problem is that identifying such actions for beginners is a rather tricky task, and not everyone can use it.

Another point is that amateur investors can exhibit irrational exuberance that creates an exhaustion gap, so waiting for the price to start falling before taking a position can be reasonable.

Related: What you need to know before investing in cryptocurrencies – Advice from investment bankers

What does price filling mean?

The gap “filling” refers to the return of the price to its original level before the gap occurs. It usually means that the price action in the following days or weeks reverts to the last day before the gap.

But highlight a few factors that affect stocks:

  • Price correction;
  • Support and resistance;
  • Patterns.

Rapid filling of the gaps causes the price to return to the level before the jump quickly. Thus, if you managed to buy shares before the jump but did not sell them at the peak, you will return to the original value or even lose a lot of money by the evening.


Trading on gaps is a very interesting process that allows you to make good money if you understand the peculiarities of price formation.

So, if you keep a close eye on the world of trading, you will be able to predict price spikes, and if you do, you will be able to enrich yourself greatly. provides the necessary statistics on the basis of which you can predict such events, as well as assess the situation. Here you can immediately execute trades and buy and sell various assets.

Related: Top Eight Safe Crypto Investing Practices

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