High-price and Low-price Gapping Plays


for example, forex

If after a rapid rise the price reaches the resistance level and stops and several candles with small real bodies appear, and then a gap up occurs such a pattern is called «High-price Gapping Plays» (Figure 1). The appearance of this pattern indicates that the bullish trend has resumed and one can open a long position.

Figure 1. High-price and Low-price Gapping Plays
Figure 1. High-price and Low-price Gapping Plays

If after a rapid fall the price reaches the support level and stops and several candles with small real bodies appear, and then a gap down occurs the pattern is called «Low-price Gapping Plays» (refer to Figure 2). The appearance of this pattern indicates that the bearish trend has resumed and one can open a short position.

Figure 2. Low-price Gapping Plays
Figure 2. Low-price Gapping Plays

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