There are several ways to trade gaps but first, there should be a solid understanding of what Gaps are and how they show up. Markets aren't that hard to read if we have some simple ways to see them that adhere to the principles of movement.
All markets move in contraction and expansion. A Gap is the sudden supply/demand imbalance that comes out of the contraction and shows up as the expansion. These expansions can even be used to measure how far the next expansion will go.
Start with a simple bar chart and erase everything else off the chart. Look and simply see the dense areas of contraction (Range). Then see the expansion (Gap), followed by another contraction.
Look for same-size contractions and expansion and you will start to see how organized price flow can be. It's no different than swings in that minor contractions and expansions make up the major contractions and expansions.
Shane
Order cancelled
⋅
Price has drifted out of the 100 bar trend without filling so canceling orders.
this is awesome. I am new to TV, and this is very helpful; great pace and great illustration. I appreciate your efforts!
ShaneBlankenship
⋅
@eyesuk, Thank you, I am relatively new to Trading View also, so you will often see me fumble around with it. Keep in mind that the market structure lessons are just a filler for the main topic, which is trade planning and discipline.
eyesuk
⋅
@ShaneBlankenship, Yes, sir, will do. I was looking at other videos of your and you have 1R and 2R mentioned, can you tell me where I can find more information on those. I am referring to your position sizing video in the follow-up comments. Thanks again sir!
ShaneBlankenship
⋅
@eyesuk, I discuss it in some of the videos. I use the same setups for each trade. When the plan says 1R I am entering the 50 % line with a buy stop to take me into a long. The other entry is a resting limit order at the 25% line. I trail stops by 2R on both.
eyesuk
⋅
@ShaneBlankenship, thank you! let me look at other videos of your, I appreciate your help