Price Action
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  • Brooks Trading Course
  • 01-Getting Started
    • Video 01: Terminology
      • 1. Common Abbreviations
      • 2. Every Market: always in either Trend or Trading Range
      • 3. Support and Resistance
      • 4. Breakout
      • 5. Candles and Bars
      • 6. Two Types of Candles
      • 7. Technicals and Fundamentals
      • 8. ABC Pullback in Bull Trend: 2 Leg Sideways to Down
      • 9. ABC Pullback in Bear Trend: 2 Leg Sideways to Up
      • 10. Minor Trend Reversal: Usually Leads to Leg in TR
      • 11. Major Trend Reversal: Bear to Bull
      • 12. Major Trend Reversal: Bull to Bear
      • 13. Inside and Outside Bars
      • 14. Scalps and Swing Trades
      • 15. On Daily Charts
      • 16. Chart Price Increments
      • 17. Moving Average
      • 18. Entry Bar and Signal Bar
      • 19. With Trend and Counter Trend
      • 20. Context: All of the Bars to the left
      • 21. Always In Direction
      • 22. Example: Always in Short, then Long
    • Video 02A: Chart basics and price action
      • 1. Candle Charts: Most Day Traders: use candle charts
      • 2. Candle Charts: 3 types of bars
      • 3. Candles: 2 parts
      • 4. Example of Doji Candle: Trading Range Bar
      • 5. Market: Purpose of Market
      • 6. Market: Goal of All Markets: find fair price
    • Video 02B: Chart basics and price action
      • 1. Volume: Market Needs More Sellers
      • 2. Volume Divergency Often Leads to Rally
      • 3. Should Traders Watch Volume?
      • 4. Depth of Market?
      • 5. News?
      • 6. Risk On and Risk Off?
      • 7. FOMO Trading
      • 8. Momentum Traders: Ignore Fundamentals
      • 9. Value Traders: Buy When Cheap
    • Video 02D: Chart basics and price action
      • 1. Candlestick Patterns?
      • 2. Market Inertia: 80% chance of more of the same behaviour
      • 3. Inertia In Trends: 80% Rule
      • 4. Inertia in Trading Ranges: 80% Rule
      • 5. Trading: Difficult
      • 6. Candlestick Patterns: False Gods
      • 7. Main Points: What Traders Talk About?
      • 8. Two Forces Control ALL Markets: Context and Momentum
      • 9. Pressure: Early Sign of Strength
      • 10. Indicators: useless
      • 11. Any Type Chart is Good
    • Video 04: My Setup
    • Video 05: Program trading
    • Video 06: Personality Traits of Successful Traders
    • Video 07A: Starting Out as a Trader
    • Video 07B: Starting Out as a Trader
  • 02-Charting Analysis
    • Video 08: Candles, Setups, and Signal Bars
      • Video 08A: Candles, Setups, and Signal Bars
      • Video 08B: Candles, Setups, and Signal Bars
      • Video 08C: Candles, Setups, and Signal Bars
      • Video 08D: Candles, Setups, and Signal Bars
    • Video 09: Pullbacks and Bar Counting
      • Video 09A: Pullbacks and Bar Counting
      • Video 09B: Pullbacks and Bar Counting
      • Video 09C: Pullbacks and Bar Counting
    • Video 10: Buying and Selling Pressure
      • Video 10A: Buying and Selling Pressure
      • Video 10B: Buying and Selling Pressure
    • Video 11: Gaps
      • Video 11A: Gaps
      • Video 11B: Gaps
      • Video 11C: Gaps
      • Video 11D: Gaps
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On this page
  • What Are Gaps?
  • 1. Traditional Gap: Space between bars
  • 2. Traditional Gaps: types
  • 3. Island Tops and Island Bottoms: Reversals
  • 4. Every Trend Bar: BO, Gap, and Climax (can be a Gap)
  • Breakout Gap
  • 1. Bull Breakout Gap: start of bull trend
  • 2. Bear Breakout Gap: start of bear trent
  • Measuring Gap
  • 1. Bull Measuring Gap: Look for measured move up
  • 2. Bear Measuring Gap: look for measured move down
  • Exhaustion Gap: Big trend bar late in trend
  1. 02-Charting Analysis
  2. Video 11: Gaps

Video 11A: Gaps

PreviousVideo 11: GapsNextVideo 11B: Gaps

Last updated 8 months ago

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.