Chapter 13

Three Powerful Price Patterns: Part II

First published: 02 January 2012

Summary

The gap trade (GT) is one of the simplest short-term methods in existence. A one-day gap is a gap that develops over the course of one day. A two-day gap occurs over a two-day timeframe. Some traders believe that a gap on a trade chart is significant. In terms of its reliability, the two-day gap results are significantly better than the one-day gap. Gaps can only be used on day session charts, not 24-hour charts. This chapter defines the two-day gap trade with concise illustrations and definitions. Practical application of the method is stressed with specific examples.

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