Aug

16

Currently I am researching price gaps. So far I must say it is a positive surprise in the flood of patterns that do not hold or are mediocre. What do Specs think about price gaps and what is your preferred game: going against the gap or with the gap?

Larry Williams writes: 

In my view, gaps are very helpful in trading as a sign of excessive emotionalism.

anonymous writes: 

Gaps are price zones with highest consensus and lowest struggle for discovery of price. When there are no buyers and only sellers without a contract traded price gaps down and vice versa.

Volume is a measurement of the struggle for discovery of price. Absence of volume then must imply minimalistic struggle for the discovery of price.

Yet, at the gaps, particularly in larger ones, there are debris of bad trades that have become bigger than the loss tolerance of over-intelligent traders. When prices return back to such gaps the "getting even" type traders provide the counter trend support / resistance, perhaps. 


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