New TA/Charting, page-8136

Hi @FlashPoint, I can't remember who put me on to it, but the least confusing way to define gaps I've come across is to classify them as "inside gaps" or "outside gaps". This is separate to whether they are exhaustion, normal or breakaway gaps. So an outside gap is the vacant space between two bars where no trading has overlapped, so a gap above is the untraded area between the high of the first bar and the low of the second. An inside gap is where there has been some overlap in trading, but there's a gap between the close of the first bar and the low or high of the second. So a gap up is between the close of the first bar and the low of the second.

It seems to me most people pay attention to outside gaps and in fairness they are much easier to spot and keep track of on a chart. I'm not sure this makes it any less confusing sometimes when talking about a gap being closed, because sometimes an outside gap being closed leaves behind a partially closed inside gap. I think this way of looking at it came from a "WRB hidden gap" trading technique I checked out a while ago, which is whole other rabbit hole.

Anyway just my 2 cents. Cheers, Rooster