About gaps:
A gap is a “jump” in a security’s price between the Open and the Prior Close. Gaps are very common in stocks during opening hours, especially when accompanied by catalysts.
What this indicator does:
This script will identify gaps that remained unfilled for at least one candle.
It is very common for gaps to be filled on the first candle, these gaps are arguably less meaningful, so they are ignored by the indicator to reduce the number of lines drawn.
Applications:
Since most gaps eventually get filled, the question is a matter of when. If going with the trend, a trader will open a long/short position when seeing an up/down gap. When going against the trend, then short/long the stock on up/down gaps and consider taking profits when price returns to where the gap originally occurred.
Originally intended for 1D timeframes, but gaps can occur in all timeframes. Applications are limitless.
版本注释:
Set overlay=true
版本注释:
UpdateS:
- Added adjustable threshold (%) in settings. Gaps with distances below this benchmark will not be plotted.
版本注释:
Refactored, and added alerts.
版本注释:
Removing lines associated with filled gaps, only showing unfilled gaps.
版本注释:
Updated UI for settings.