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The GAPS: The silent trap that many traders ignore

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In crypto trading, there is a phenomenon that goes unnoticed but can take you out of the game: GAPS. Basically, it is when the price “jumps” between sessions - it closes at one level and opens at a completely different one.

What causes this? Breaking news, central bank decisions, geopolitical movements, or simply when people panic sell ( or buy like crazy ).

The 4 types you need to know

Common GAP: It comes up every now and then, closes quickly, it's not a big deal. It's noise.

Breakaway GAP: This one definitely has character. It appears when the market breaks an important resistance/support level. Generally, it means that a strong trend is coming in that direction.

Continuation GAP: The trend is already in motion and suddenly a gap appears in the middle. Translation: the trend continues on its path, it is not a change of direction.

Exhaustion GAP: The dangerous one. It appears at the end of a strong trend and signals that the movement is coming to an end. Change of direction nearby.

How to make the most of it

  1. Identify first: Open the 4H or daily charts, look for those jumps between candles.

  2. Validate with other indicators: Don't rely solely on the GAP. Combine with support/resistance, volume, RSI.

  3. The 3 key strategies:

    • Follow the wave: If you see a breakout GAP, enter in that direction
    • Take advantage of the gap closure: Many common gaps close quickly - sell/buy expecting it to fill.
    • Increase bets: If there is a continuation GAP, add position in favor of the trend

What nobody tells (but it is important)

GAPS are volatile AF. Sometimes you see one and think “I'm going to get rich” but it turns out to be a fake - it closes without any opportunity. Also, in crypto, the 24/7 market complicates things (the most obvious GAPS are in perpetual futures between sessions).

The reality: GAPS work if you combine them with other tools. They are not magic, they are just one more clue in the puzzle of technical analysis. Use them, but don't get obsessed.

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