📊 Gap Up & Gap Down
Part of Complete Stock Market Learning Series
📌 What is a Gap?
A gap occurs when a stock opens at a price significantly higher or lower than the previous day’s closing price, leaving an empty space on the chart.
📈 What is Gap Up?
Gap Up happens when a stock opens higher than the previous day’s high. It usually indicates strong bullish sentiment.
- Positive news or strong results
- High buying pressure at open
- Often seen in bull markets
📉 What is Gap Down?
Gap Down happens when a stock opens lower than the previous day’s low. It reflects bearish sentiment or negative news.
- Negative news or weak results
- High selling pressure
- Common in weak or volatile markets
📊 Gap Up Chart Example
👉 Opening price jumps above previous close creating a gap.
📊 Gap Down Chart Example
👉 Opening price falls sharply below previous close.
💡 Trading Logic of Gaps
- Gap continuation → trend may continue
- Gap filling → price may retrace to close gap
- Gap with high volume = stronger signal
- Use support–resistance for confirmation
⚖ Important Note
Not all gaps lead to strong trends. Many gaps get filled during the same day or within a few sessions. Always wait for confirmation before trading gaps. This content is for educational purposes only.
🚀 Learn Gap Trading Practically
Understand gap behavior, fake gaps, and intraday gap strategies with real chart practice. Advanced strategies are included in premium programs.
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