Community Forex Questions
What is continuation gap or runaway gap?
When the market is already in a trend, the continuation gap occurs. Thus, if the trend is bullish, the gap is bullish, and if the trend is bearish, the gap is bearish.
This scenario occurs rather mid-trend, allowing the potential value to be calculated. Strong volumes, in general, follow the movement; if they are weak, the configuration remains unchanged.
This type of chasm is difficult to bridge.
This scenario occurs rather mid-trend, allowing the potential value to be calculated. Strong volumes, in general, follow the movement; if they are weak, the configuration remains unchanged.
This type of chasm is difficult to bridge.
A continuation gap, also known as a runaway gap, is a type of price gap on a trading chart that occurs in the middle of a strong trend, signaling that the trend is likely to continue. It usually appears when a stock, currency, or asset is moving decisively in one direction and reflects strong market interest in the trend’s direction. Unlike breakaway gaps, which start a trend, continuation gaps happen after a trend is established, reinforcing momentum. They indicate that demand or supply is still high enough to drive prices without filling the gap immediately. Traders often interpret these gaps as confirmation of the current trend and may use them to add to positions or adjust stop-loss levels, expecting further movement in the trend's direction.
Nov 17, 2022 01:12