Live Chat Software by Kayako |
What is Gap?
Posted by Homi .M on 02 May 2013 02:52 PM
|
|
A break between prices on a chart occurs when the price makes a sharp move up or down with no occurred trading in between. Gaps can be created by factors such as regular buying or selling pressure, earnings announcements, and a change in an analyst's outlook, during an adverse development of a financial/economic issue or any other type of news release. Forex gaps can happen at any time of the day as long as there is a disconnection of the price of the currency pair.
There are 4 types of gaps In Forex trading. Common Forex gaps These gaps are brought about by normal market forces and, as the name implies, are very common. They are represented graphically by a non-linear jump or drop from one point on the chart to another point.
Breakaway Forex gaps A breakaway gap represents a gap in the movement of a stock price supported by high volume levels. Runaway Forex gaps A type of gap on a price chart occurs during strong bull or bear movements characterized by an abrupt change in price and appearing over a range of prices. They are best described as gaps caused by a sudden increase/decrease in interest for a stock.
Exhaustion Forex gaps A gap occurs after the rapid rise in a stock's price begins to tail off. An exhaustion gap usually reflects falling demand for a particular stock.
| |
|