Following are the different types of Gaps.
1⃣ Gap-up
2⃣ Gap-down
3⃣ Common gap
4⃣ Breakaway gap
5⃣ Continuation gap
6⃣ Exhaustion gap
7⃣ Island gap
1⃣ What is Gap-up?
When the opening price is above the high of the previous day, we get a gap-up.
🟢How to trade?
➡️Trade in the direction of the gap-up as long as the price remains above the opening of that day.
1⃣ What is inside a candle
When you see a big candle red/green followed by a small candle such that the high and low of the small candle are inside the previous candle high and low then such a candle is called an inside candle. The big candle is called the parent/mother candle
2⃣ When to take entry and where to put SL
The entry is taken once the low of the mother candle is broken by and candle followed by the inside candle
(the time frame used is 15 min)
and SL is placed at the high of the inside candle (for low-risk takers)
3⃣ How to decide the target
The target is equal to twice the height of the inside candle. ex: if the inside candle is 40 points then the target will be 80 points.