GAPS are very easy to identify in that they are openings
in the price chart where no trading occurred. They are a void in price. A
point at which no buyer or seller could be found. This can occur when there is an
imbalance of orders where there are a large number of buyers and the sellers must be
offered a premium to entice them into to parting with their shares. |
Looking at the graphic above, you can see where the prices have closed on
one day, and the trading began the next day at a point well above or below the previous
high or low. |
There is an old adage that a "gap must be filled" and that the
prices will return to complete the area where the stocks did not trade. Many trades
have been missed waiting for this to come to past. |
In Candlestick
language, the gap is called a Window. |
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