GAPS in trading: A deep dive for traders

GAPS are those strange gaps in market charts. Fascinating. They occur when there is a jump between the price that closes one session and the price that opens the next. Why do they happen? Shocking news, surprise corporate earnings, or simply imbalances in supply and demand.

Types of GAPS you will find

1. Common GAP: You see them everywhere. They don't last long. They close quickly. They are small market scares, nothing serious.

2. Break Gap: These are more interesting. The market seems to wake up after a slumber. It breaks its boredom and starts something new. Powerful. Worthy of attention.

3. Continuation GAP: They appear during trends that are already in motion. As if the market is saying: "I'm serious about this." They reinforce the existing movement.

4. Exhaustion GAP: The last breath of a trend. It seems like it wants to continue, but it's tired. They often signal the end of the road.

How to trade with them (without going crazy)

Search well: Modern platforms make it easier for you to find them. It seems that in 2025 the tools are much better than before. It helps a lot.

Don't rely solely on the GAP: Also look at the Japanese candles. And the indicators. And the supports. All together makes more sense.

Trading Options:

• Follow the breakout: If you see a GAP that breaks something, you might want to go with it. It could be the beginning of something big.

• Bet on the return: With common GAPS, expect the price to return to its place. They often do. Not always, of course.

• Strengthen your positions: If you are already in a trend and a continuation GAP appears, it might be time to add more.

Watch out for this

Everything is shaking: Where there are GAPS, there are nerves. Volatility rises. Greater opportunities, risks too.

Some deceive: Not all GAPS deserve your attention. Some are just noise. They disappear without a trace.

GAPS are like clues in a mystery. They don't tell you everything, but they hint at quite a bit. If you learn to read them along with other signals, they could give you that edge you're looking for. Or not. In the markets, you never really know.