Best Chart Patterns for Gap Trading
Gaps occur when price opens significantly higher or lower than the previous close, creating a visible void on the chart. Gap trading strategies exploit the tendency of some gaps to fill and others to run. Understanding gap types is essential for trading the market open and managing overnight risk.
Top Recommended Patterns
Occurs at the start of a new trend, breaks key levels with high volume, and rarely fills.
A gap-isolated candle or cluster that signals a powerful trend reversal.
A final gap in the direction of the trend that marks the end of the move.
Occurs mid-trend, signaling strong continuation as momentum accelerates.
Price inefficiencies visible in candle wicks that price tends to revisit and fill.
A morning gap that continues in the direction of the gap, rewarding early entry.
Frequently Asked Questions
Do all gaps get filled?▾
No. Common gaps and exhaustion gaps tend to fill, while breakaway and runaway gaps often do not fill. About 70% of common gaps fill within a few days.
How do you trade a gap up?▾
For gap-and-go: enter on the first 5-minute pullback if the gap holds. For gap-fill: wait for weakness and short back toward the previous close. Volume is the key differentiator.
What is the most profitable gap pattern?▾
Breakaway gaps are the most profitable because they initiate new trends. If a gap breaks a key level on high volume and does not fill within 2-3 bars, it has a high probability of continuation.
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