A gap is a discontinuous space on the price chart which may appear during rapid price changes. On the chart, a gap looks like an area where the price moves sharply up or down, which creates a space between the closing level of one trading period and the opening of another. You can observe a gap only on the following chart modes – bars and Japanese candlesticks.
Quite often, a gap is not only a consequence of a strong trend but also a signal confirming it. For example, if the opening price is lower than the previous day's close, this may point to a possible downtrend.
Quite often, a gap is not only a consequence of a strong trend but also a signal confirming it. For example, if the opening price is lower than the previous day's close, this may point to a possible downtrend.
