That's an unusual way of defining a gap.
Given price data is a constant stream and the time-limited bundles of data per bar (with time-based charts), current bar open compared to previous bar close is a standard method of determining gaps in many circles.
But hey, whatever works!
Yes, I realize that different folks define gaps differently. This is just some of the ways I see gaps. I also see gaps between MA and bars. Open and close of a bar and the bars before it or two bars back. High and high of adjacent bars or two bars back. High and low of adjacent bars and or two bars back. Low and high of adjacent bars and 2 bars back. Opening gaps. ETC. This is
bar by bar analysis within 3 contexts mentioned in posts above. Gaps are important as they show probing...the market seeking tradeable value. Like an auctioneer...(who will give me 500...can I have 600...650...700? Sold to the man in black for 800!) Markets are gonna move to where transactions will take place. That is the foundation and general purpose for even having markets. Money can only be made if transactions are taking place. That is the name of the game. Nobody wants to trade a dead market..well ...accept me.. and a few other radical traders..I will trade anything..I don't believe in noise. Noise on a 5 min chart is can be a trend on a 1 minute chart. Ad nauseam.
My second trade this a.m. showed trading a gap between a low of a bar and my first entry point expecting the gap to close for at least a minimum scalpers profit.
The idea is to gauge the pressures in the larger, intermediate, and immediate contexts and then use setups for entry and exits that make sense and will render me at least a min scalp. If you observe I often exit early and if I would have held I could get more profit. Thing is, the market is handing me a profit right NOW AND price is in a range, so I take the profit, gladly. If price moves on I can enter again. Most traders get chopped up trading chop because they are trying to hold on more profit. Sometimes, they will get it but much of the time they find themselves in a profit (which they don't take) then minutes or seconds later the profits vanishes into thin air and their tight SL (stop loss) get wacked. They finally give up trading ranges which they call "chop" because they got chopped up!
But range trading is where the market IS at most of the session. BO's comprise at most 10% of a sessions PA. Channels (which are really just tilted ranges) and Ranges comprise the other 90% of a sessions PA. So, to me anyways, it makes more sense TO trade chop rather than MORE sense TO NOT trade chop.
Anyway got to run do few more things.
Remember, I said earlier that a channel was likely to evolve. Well here we are. I had to do some things in the yard (helping my dear wife) and now have to run to town, but here it is. What will likely come next? We should be looking for what phase of the market cycle is likely to be next.
It will likely morph into some sort of a range in the last 2 hours of trading. But is has to start pretty quickly or price will likely stay in a channel until the close. It is now 1:23 Chicago time.
But notice also that from 11:15 to 1:23 it is also a sort SPBL trend. But I prefer to call it a channel because the PB's ain't that tight and that small. But, it could be labeled a medium pull back pull trend. LOL
Notice the flattening of the channel slope..(purple line) Hints of a developing range. We want to see 20 bars sideways action to begin range trade. Sometimes I will on 15 bars but then I am more used to it.
Why? because 20 bars will usually be enough to prove out that the sideways action is NOT a PB in the form of a flag but is actually a range.
