Price gaps are prices within a certain time period that is between the high and low of the period, but for which there were no trades. Like spikes, price gaps often result from the dissemination of important news.
Price gaps generate other action levels as well. The most obvious is the support line in an up gap (or resistance line in a down gap). We'll call these "reverse break" lines.
Price gaps higher, including the shadows, in an uptrend and forms a doji candle. A doji is one in which the opening and closing prices are within pennies of each other.
Three Trading Tidbits ...
If price gaps up or down and then closes mid-way between the day's high and low, the indicator records no change. It does not account for gaps.
CMF also has a tendency to "bark twice".
When price gaps up/down and then trades above/below the gap but then the gap goes down/up leaving all the price action unconnected like an island.
Laggard
A stock or sector that underperforms the market.
Moreover, price gaps down on Day 2 only for the gap to be filled (see: Gaps) and closes significantly into the losses made previously in Day 1's bearish candlestick.
The next day price gaps open once again, but to above the high of the Doji Star and forms a white day. The long black day in the downtrend fuels the underlying bearish sentiment.
Gap-Up-Then-Drop-Back sell signal: Sometimes, because of market reaction to industry news, earning surprises, floor rumors, etc.) a stock price gaps up and opens higher than yesterday's intra-day high, ...
If the price gaps up and continues higher, put a sell stop at the open price.
Others sell their positions throughout closing to prevent the risk of price gaps. Value gap is the distinction in between a previous days closing and also the subsequent days opening costs.
Average true range - averaged daily trading range, adjusted for price gaps
Chart pattern - distinctive pattern created by the movement of security prices on a chart ...
A Gap over - this is where a market price gaps over a MMTLine (horizontal), which would signal that this market ignored the MMTLine, so we must expect it to run toward the next MMTLine, ...
The Psychology
In a downtrend, the price gaps down and bounces intraday with a white candle. This proves to be simple profit taking by shorts and bottom fishing by dumb longs when the downtrend continues with the next day's gap down and low close.
"Need to know concepts" including trendlines, moving averages, reversal patterns, price gaps, price patterns, and more!
Price forecasting and market timing applications.
I have been using my proven trading model which avoids the price gaps and keeps risk for each traded under 3%.
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For example the "morning star doji" - price is coming down. Price gaps down a little and then demonstrates a "slowing" of this falling trend. The next day it gaps up and shows strngth. This is bullish
Top 10 Candlestick Patterns ...
An important short-term price factor is the gap-up that occurred on Friday morning, as mentioned above, the price gaps, prices at which no trading occurred from the closing price of the previous day, are usually covered soon after.
Gap Trading Strategies - Various strategies for trading based on opening price gaps.
Swing Charting - What Swing Trading is and how it can be used to profits under certain market conditions.
IMPORTANT: It should be noted that the CMF has a weakness -- it does not account for price gaps. If a gap in prices occurs, the CMF indicator will have a NULL value (i.e.: no value) for n-periods after the gap.
A good example of a situation where True Range would be significantly larger than the normal daily trading range would be when price gaps occur on bar charts.
will be breached either upwards or downwards, and the price will keep registering new lows or highs. Breakout is the name given to this process, where the range breaks down, the price jumps in a fast and sharp movement, and sometimes price gaps occur.
 See also: Gaps, Trading, Market, Stock, Chart
  
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