Stupid Questions Thread, page-7

  1. 11,875 Posts.
    "Line wiping" isnt anything important, all it is are orders getting chewed through on the sell side of the market depth


    Gaps are another thing and there is plenty of misinformation about them on Hotcopper

    A gap, is a price change in trading that isnt continuous, a jump in price between an open and close of trade and its importance is directly proportional to the volume of trade, the size of the gap in % terms and how long ago it happened. this is because lots of stops can be placed at a price point relevant to the gap that was large and happened on high volume, those stops expire, or get cancelled with the passage of time, so their significance gradually diminish

    Note: The shape of the price chart prior to the gap can also matter as well

    Often you will read on Hotcopper people talking about miniscule gaps from years ago closing, that didnt have much volume at the time, so in the grand scheme of things matter very little, because few people hold positions and stops at that price point

    Thats when you know your reading someone's post, who doesnt really understand the trading significance of gaps
 
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