Gap up trading
Price gap up, tight consolidation
Tips:
- This is forex, not a stock. But the tips should apply as well.
- Price has a gap up, how to confirm it is a true break out or a false break out? Maybe a tight consolidation is a method.
- Before the gap 2017 May, there were several times the price tried to challenge the resistance line.
- Once gap up, a false break out then followed by a tight consolidation, can say the resistance became support.
- After the consolidation, price broke out using a way called red three soldier.Then the second break out can be treated as buy hint.
Zoom in:
The gap up without consolidation
- This gap up has no consolidation, means very strong trend.
- The gap breaks out the previous channel.
- During the break out and gap up, There are all consecutive medium green bars, very bullish.
The gap up with volume
- This gap up has no consolidation, means very strong trend.
- The gap breaks out the previous channel.
- The previous channel is a slant upwards channel. This is a bullish pattern.
- The gap up day's volume is very good to confirm this gap is a long hint.
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