Well, today you are going to have a lot of fun in this video. The reason is that today’s video is about how you can trade on gap up and gap down. By the way, you also know that if you trade on right gap up or right gap down, then you can catch a big movement. How to do this? What will be our strategy?
Today we will learn in this video only and only with Mr. Umesh Sharma. Umesh ji, welcome to our GoSelfMade show.
And people will be very excited for today’s video. So let’s start. In today’s video, we are going to tell you about the gap.
Now you must have heard a lot that a common gap is seen in the market. Breakaway gap is seen which basically occurs on the breakout of support and resistance. In this way, runaway gap is seen in the trending market. And apart from this, you must have also seen many island reversal gaps in the market. But today the gap that I am going to tell you about is very important because whenever there is a gap up or gap down, you have to use a strategy. And this strategy works very well in the open market. You have opened the market at 9.15. You just have to look for a gap. And according to this gap, you have to trade with a small stop loss. So today I would like to tell you about the gap. What is the strategy? And we will explain this strategy in two ways. One for selling and the other for buying. So let’s start quickly. And I would request you to watch the video till the end.
First of all I would like to tell you what is a gap? Gap is basically the effect of changes in the overrun market which is seen the next day, whether it is a gap up or a gap down. Basically, what happens is that suppose some news came in the market the previous day. And after that you see the news in the market that according to the bid in the pre-open market, gap up and gap down are seen in the market and many people also say that the gap that is formed, like I am talking about 10 years ago, many people used to say that the gap that is formed, it gets filled in the market. So because of this people used to say that when a gap is formed or gap up happens, then they used to try to create more selling positions, that this gap has been formed, it will be filled more. If the gap down opens, then many people used to say, they used to try to create buying positions there, that this gap has been formed, it will be filled more. But today I will try to tell you about the gap in every way.
I have also told you what a gap basically is. And today like common gap, runaway gap, as well as these island cluster gaps, I will tell you some basic things about all these. Then after that we will talk about the strategy.
Basically what happens is that whenever we learn a strategy, but before that it is very important for you to understand its basics. So now we will talk and here I would like to tell you about the common gap.
What is a common gap? Common gap is formed in a range. The market has a range, the market has a range and the market is fracturing in the middle. Now in this fluctuation you will see something like this. Now suppose there is a gap in the market. Now I would like to tell you a little more about the gap.
What happens, suppose we get to see a bullish candle. What is a bullish candle? As we told you in the last few videos, whose opening is below and closing is above. Now suppose a candle opened the next day and that candle was a bearish candle. Here it opens. Now what is a bearish candle? There will be a slight difference between the low of the previous candle and the high of this candle.
That is, the bearish candle will be outside the range of the previous candle. This can be called a gap down.
If we look at the second case, here we see that the market opened like this the next day.
Like we talk about a gap up, the market opened and the next candle can be bullish or bearish, it does not matter.
Here we see that there is a difference between the high and low of this candle. That gap can be big or small, it does not matter. And this candle is outside the range of this candle. This can also be called a gap. I told you that the effect of changes in the previous market is seen in the market of the next day. Now friends, we told you what a gap is, how one candle is outside the range of another candle. But how to trade on it, I will tell you later.
But here I would like to tell you about a common gap. As you saw the market is running in a range and the market is working in this way. You can see the candle in this way. The next day you saw that a gap was seen. Now we will tell you later how to trade on this gap. But this is a common gap. That is, another candle was seen like this, another candle was seen here, this gap was also seen. That is, a common gap is always seen in the range. Now we will talk about the second gap i.e. break-away gap. You must have heard about the break-away gap, but here I would like to tell you that the break-away gap is always seen in the range.