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Video 11A: Gaps

What Are Gaps?

Any space bewteen current price and any support and resistance.

ANY S/R:

  • HLOC of any bar

  • MA line

  • Trend line

1. Traditional Gap: Space between bars

  • gap up: strong bulls

  • gap down: strong bears

  • Gaps are common on daily charts, especially in TRs. These gaps are useless.

2. Traditional Gaps: types

  1. Breakout Gap:

    1. early trend

    2. break out a trading range.

  2. Measureing Gap:

    1. mid of trend

    2. 每当有一个gap，你都要去想一想它的Measure move在哪里，只是一个猜想。

    3. 但只有到接近目标位，你才能确定这是一个测量型缺口。

    4. 在实操中，你要留意测量型缺口的Measure Move位置，在那个地方，可能会有止盈的人。

  3. Exhaustion Gap

    1. late of trend

    2. 但此时，你并不能知道这是一个衰竭型缺口，还是一个测量型缺口。

    3. 直到缺口被回补，才能确认这个缺口是衰竭型缺口。

  4. Common Gap: in a Trading Range.

    1. Gaps in trading range are common gaps.

3. Island Tops and Island Bottoms: Reversals

  • Island Top is a gap up followed by a gap down. can lead to a reversal down.

  • Island Bottom is a gap down followed by a gap up. can lead to a reversal up.

  • But EVERY island reversal is simply a reversal, has no sepcial significance.

  • Every reversal can be thought as a special type of Island Tops or Bottoms.

  • 正因为我们把岛形反转只是看做一个简单的反转尝试，所以正如大多数的反转必将失败一样，大多数岛形反转也是失败的。之后不一定会有大的反转趋势。

  • 岛形反转的两个缺口，不一定要在同一个或者相互接近的价位。

  • 岛形反转，有可能不止两个缺口。但可以总体看做一个岛形反转。

  • 岛形反转，的那个“岛”，可以是一根K线，也有可能是多根K线，甚至是一个整个交易区间。

4. Every Trend Bar: BO, Gap, and Climax (can be a Gap)

  • 我并不关心岛形反转顶部或底部、衰竭型缺口、突破型缺口，我只关心动能: 趋势性K线。

  • Every trend bar and series of trend bars, is what I care:

    • BO (also called spike)

    • Gap (breakout, measuring or exhaustion)

  • Every trend bar is a breakout, every trend bar is a gap, every trend bar is a climax.

  • Every trend bar is a gap, every gap is a trend bar.

Breakout Gap

1. Bull Breakout Gap: start of bull trend

  • close near high of bar

  • better, if there's a big bar and big gap.

  • better if it close above many bars, or above a lot of resistance.

  • Consecutive bull breakouts even better

2. Bear Breakout Gap: start of bear trent

the Bear BO bar

  • close near low of bar

  • better if big bar and big gap

  • better if close below many bars or other resistance, such as a bit gap to the upper-trend line.

The measure move will be these two Bear BO bars x 2.

Measuring Gap

1. Bull Measuring Gap: Look for measured move up

  • Bull trend bar (the bar in green in the chart above) after bull has gone 5 -- 30 bars. (mid of trend)

  • Its close near high of the bar.

  • Its close is above all the prior bear bars.

  • Retest bar (doji bar) left a gap above the prior bear bar's top. And the Doji Bar close above 1/2 of the full bar.

  • This is a Bull Measure Gap.

2. Bear Measuring Gap: look for measured move down

Exhaustion Gap: Big trend bar late in trend

  • When gap forms in late in a trend, after 10 - 20 bars, it can be either: Measuring Gap, or Exhaustion Gap.

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