1/
Most traders see a gap and panic or chase.
Elite traders see a gap and read it like a map.
Here's everything about gaps the market doesn't teach you 🧵👇
2/
A gap = price jumped from yesterday's close to today's open.
A gap = price jumped from yesterday's close to today's open.
No trades in between.
That empty space on your chart?
The market screaming:
"Everything changed overnight."
The market screaming:
"Everything changed overnight."
3/
Gaps aren't born at 9:30 AM.
Gaps aren't born at 9:30 AM.
They're built between 4 PM and 9:29 AM.
Earnings. FDA. Upgrades. Geopolitical shock.
While you slept, institutions were repricing.
While you slept, institutions were repricing.
By the time the bell rings , the gap is already decided.
4/
Two stages most traders completely ignore:
Two stages most traders completely ignore:
After-hours: First knee-jerk reaction. Thin liquidity. Retail + algos. Usually an overreaction.
Pre-market: Institutions arrive. Price gets refined. Spreads tighten.
The 9:29 AM price always tells more truth than the 4:15 AM spike.
Watch both. Trust the latter.
5/
Pre-market volume is your cheat code.
Pre-market volume is your cheat code.
Big gap + LOW pre-market volume = weak, likely to fill
Big gap + HIGH pre-market volume = strong, likely to continue
Big gap + HIGH pre-market volume = strong, likely to continue
One number changes your entire bias before the open.
6/
There are 4 types of gaps.
There are 4 types of gaps.
Trade them all the same way and you'll lose money on all 4.
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