Continuation Gap

A stock will be trading sideways & then suddenly it will "gap away" from the cost pattern. There's main types of stock cost gaps: breakaway-gap, continuation-gap, common-gap & exhaustion-gap. Each of these happens at different stages of a stock cost move. as important is the fact that the appropriate spread betting strategy to make use of depends on the type of gap in query, so for practical spread betting purposes, being able to identify the type of gap that is being formed is crucial. When you want to use investing in stock shares as a patient road to wealth creation, Stock Tips your online stock trading can be an excellent way to build your wealth.

often, when a stock is in a powerful trend, it will gap strongly (up or down) in the direction of the prevailing trend. These types of gaps are known as continuation gaps. Continuation gaps always occur in the coursework of powerful trends. So, in an up trend, the stock gaps up while in a down trend, the stock gaps down on its way to lower prices. Continuation gaps are usually accompanied by strong spike in trading volume. To the professional trader or financial spread better, continuation gaps provide confirmation that the trend remains in force & that the market sentiment behind the continued trend remains strong. In these situations, it pays to spread bet in line with the trend.

Now, not all gaps represent important or lasting market sentiment. Indeed, the most often occurring type of gaps, known as the â common gapâ , are usually short lived jumps in prices on way or the other. thing that is statistically clear about common gaps is that they are short lived & prices revert to close or fill the gaps quickly.