How Gap Trader Works
Gaps in the current marker happen to occur if there is a great change in the forces of supply and demand for a particular security. The prices of the commodity may raise and this makes suppliers these commodities not willing to part with their shares in the currently traded price or even from the closing price from the previous day. The other way round for buyers happens when the price when it goes down, buyers are also not willing to exchange shares of their previously traded price or closing price from the previous day. Both of these things usually happen then there is security news concerning the future or immediate security query and the only lead in the market is the leading indicator. If there is a great change in the future in terms of security, this is the time when there is always a big trade gap in the market. When it comes to trading the current market, most of the sellers of the currency will check when the currency price has gone low… They will buy a lot of currency and keep them for security reasons. In case there is a big gad in the current market, and the sellers of the currency will see that the market is going to have a reduced price in the buying and selling of the price of the currency, they will buy a lot of shares into the current market making the market to have less currency. This will cause a big gap to occur. When they notice that the currency price is high, this is the time they will plan to sell out their shares and make a lot of profit.
On the other hand, buyers of the trade price in the current market will also check when the trade price has gone low and they will sell their shares to make a lot of profit. The lucky people who have a lot of shares and are not willing to sell them at the previous days close and earn more cash to part with their dollars. The demand for the dollar will go high since the buyers are willing to be part and parcel of the shares and they will happily pay more dollars to get the shares. If the market opens the following day, tend the gad happen to occur for exactly a few dollars. This type of gap is known as the breaking gap whereby the price of the shares has remained constant though it is very fresh and there is a new demand for the shares the following days. This article will also check on other gaps that are currently in the market.
The breaking gap will always occur when there is a security issue and it is usually followed by a high volume. For a gap to be known as breaking the trade gap, the price of the shares need to have gone sideways due to security reasons and there is a congestion of the price within a known range. For a fresh market of the shares, this is enough to make the price of the shares to move sideways and make sellers and buyers of the shares buy or sell their shares in a potential company.