Gaps are market prices structures that appear frequently in the stock market, and can be detected when the opening price is different from the previous closing price, this is why gaps are also called "opening price jumps". While gaps can occur frequently, some of them are more significant than others, and can be observed when looking at a long term chart.
The...
Like the nature, markets don't like the void, and this is something we can take advantage of by trading gaps on some markets.
This technique is well known, so I wanted to write a tiny script based on this strategy to get a bit more comfortable with it.
IMPORTANT: Default parameters wont give you good trades on every markets, you need to modify these parameters...
A "Gap down Reversal" is when the current days candle, opens, below the prior days close, and "finishes up" on the day with the close greater than the open. This type of price action can provide traders with favorable entry points to trade long, as anyone who was short the prior day, can get squeezed or panic out of the trade as they would see profits erode...
