Nice post. I do understand that gaps are mostly filled but I...

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bobadah

10,191 Posts.

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19/07/18

09:51

Post #: 34440477
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Originally posted by Gordo7 ↑

I just want to provide my take on 'gaps' and the need for seeing them filled before moving on, which seems to have become a major talking point here and elsewhere.

I don't place anywhere near the same degree of importance on the need for them to be filled than most enthusiasts. I believe a bit of common sense is required rather than a superstitious belief.
I dare say that very very few market participants will even be aware of their existence when they occur, particularly if the gap is small. So why should they logically be filled ?

Consider that the majority of the time (70% ?) markets are not trending so it is not unreasonable to suppose that any price within a trading range will be crossed in fact a number of times. Also, a gap in price movements implies some degree of strength and we know that profit-taking is more likely to occur after a strongish move.

Consider the 3 small gaps I have highlighted during the strong trending run PLS had last year. Are we still waiting for those gaps to be filled ? Did anyone wait for them to be filled at the time they occurred ?

It's those none too frequent types of runs we want to be aboard to generate the type of % moves we are holding in anticipation. You can be right about gaps being filled the majority of the time, but the one that got away...

As a final comment, sometimes those gaps can also act as support, seen that occur numerous times as also seen in the highlighted areas.

So do I think the latest 'gap' will be filled ? Yes, but only because in my opinion we are not yet ready for 'prime' time, and I have about a 70% chance of being right about that

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Nice post. I do understand that gaps are mostly filled but I have always believed that markets go up and down regularly and that that is the reason most gaps are filled. However, my view on gaps might change if I could see some statistics showing that an x% fall to fill a gap was significantly higher than any other x% fall in the market price. The same principle would apply to higher gaps.

PLS Price at posting: $1.01 Sentiment: Buy Disclosure: Held
3 Upvote

0 Great analysis

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