whativer: Gap can be measured from the high/low range of prior time period (e.g.day) to the open of the next time frame(e.g. day). For regular trading, one can use the intraday high/lows of the prior day, to the gap opening of the current day, on daily charts.
For example, if the high of the first day was 4010, and it closed at 3990, it would have to open above 4010 the next day to have a gap on the daily charts, but on the hourly charts it would show a gap if it opened up above 3990 or below 3990. Same but opposite for down gaps.
Depends on what time frame you want to determine if there is a gap.
We used hourly charts to discuss the gap opening on Tuesday, as there was no gap on the dailies. The shorter the timeframe, the more likely it will fill usually, as it takes a smaller move for it to gap.
Hope that helps. I will have a TA article on gaps forthcoming.
Dr.Bob |
