Gapping

Volume Spread Analysis Glossary

A bar that opens outside the previous bar's range, used by market-makers to reveal directional intent with particular clarity. Weak gap-ups occur when the market-maker marks prices sharply higher at the open (often on good news) to trigger FOMO buying and catch short-sellers' stops, then distributes into the resulting frenzy; these typically show high volume with the spread narrowing into the close. Strong gap-ups occur when the market-maker is bullish and wants to leap over an old trading range, denying locked-in traders the chance to sell at breakeven; these are accompanied by expanding volume and the market does not fall back.

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