Course Name: Day Trading Strategies for Beginners, Section No: 6, Unit No: 11, Unit type: Document
I am unable to spot the Gap Up & Gap Down, manually looking at chartts could not find any. I trade crypto only and checked BTC chart for 1D.
How to get it easily? any guidance?
Hello Sami,
In equity markets, gaps (gap-ups and gap-downs) on daily charts are common, especially when there is a significant difference between the closing price of one day and the opening price of the next. However, this is less common in the daily charts of cryptocurrencies like BTC, as those markets operate 24/7, unlike traditional stock markets that are open only during defined trading hours.
That said, you can still find gaps in cryptocurrency charts on lower timeframes, such as 1-minute and 5-minute charts.
I hope this answers your query. If you need any further clarification or have additional questions, feel free to leave a comment.
Hi Varun
The strategy can be applied to lower time Frames too?
On Gold I found gaps on H1 or H4 time frames.
Hi Anil,
The gap-up and gap-down strategy will only work if the momentum of the gap-up/gap-down move persists. This generally happens when these gaps are formed due to major economic releases or news events.
You can also find these gaps in lower timeframes but this gap could be because of a drop in liquidity, change in session changes (if it’s a 24-hour market), due to inventory reports (in the case of commodities) and major releases that effect the asset.
So, for a lower timeframe, we need to pick the gap scenarios which were triggered by events or news that cause momentum (but not due to liquidity changes or session changes).
I hope this helps.