High Price Gapping Play (Price gap at the top) and Low Price Gapping Play (Price gap at the bottom) are two consecutive candle samples characterized by gaps. These models often appear more on large time frame charts such as days, weeks or at times when the market has important news. Knowing how to identify these models will help you be more active when they appear on the chart.
What is High Price Gapping Play?
High Price Gapping Play is a continuation candlestick pattern. This pattern begins with a strong bullish candlestick, followed by a cumulative sideways period with the short body candles. Finally, High Price Gapping Play created a gap and ended with a strong bullish candle. You can see the illustration below to visualize better.
In contrast to High Price Gapping Play (Low price gap at the bottom) is the Low Price Gapping Play model. This pattern begins with a strong bearish candlestick, followed by a cumulative sideways period with short-body candles. Finally, Low Price Gapping Play creates a gap (gap) and ends with a strong bearish candle (see illustration).
Features of High Price Gapping Play
The High Price Gapping Play candle pattern has the following characteristics:
- Appears in uptrend, giving bullish signal
- Start with a strong bullish candle and end with a strong bullish candle
- The middle candlesticks have a short, horizontal body
- Must appear gap gap
- The number of candles should not be more than 11. This means that if more than 11 candles have been created but the gap has not appeared yet, the pattern may be considered to be invalid.
Similarly, the Low Price Gapping Play model has the following characteristics:
- Appears in downtrend, giving bearish signal
- Start with a strong bearish candle and end with a strong bearish candle
- The middle candlesticks have a short, horizontal body
- Must appear gap gap
- The number of candles should not be more than 11. This means that if more than 11 candles have been created but the gap has not appeared yet, the pattern may be considered to be invalid.
These two patterns appear in the middle of the trend and after completion will give a continuation signal. It is also important to note that the pattern needs a gap, and there must be a period of price moving sideways with small candles.
Psychological evolution of High Price Gapping Play model
Initially, the market rallied with a fairly long candle, but buyers started to take profits, while the crowd was not confident and still waiting for more signals to enter the order. At that time, the market was quite gloomy and disoriented, causing prices to move sideways with small body candles. After a quiet time, the price appeared a gap that caught the attention of the participants.
How the market responds to this gap is important. If the gap is filled, that is, the price goes down, it indicates that the market has rejected the last price action and could turn that gap into an exhausting gap, causing a reversal. But if the price continues to rise as shown in our model, it represents a buyer's excitement and a high probability that the price will continue.
Actual example of High Price Gapping Play model
Here we take a typical example for High Price Gapping Play model with two consecutive appearances. In the chart below, we see that after the High Price Gapping Play pattern first appeared, the price then continued to rise until the Dark Cloud Cover reversal pattern was encountered.
Next is an example of the Low Price Gapping Play model. After the first bearish candlestick has finished, there have been 7 small moving candles accumulated before the bearish gap appeared, indicating a sell signal.
Epilogue
We have just introduced you to the High Price Gapping Play model and the Low Price Gapping Play model. Hope you have accumulated some useful knowledge after reading this article.
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Author: Tin Nguyen
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