All language subtitles for 4. Breakaway Gaps

OK, breakaway gaps, very, very, very important, and what happens when there's a breakaway gap is

it's going to bring in a lot of new traders, you know, add volume.

That's one way you can tell if it's a, you know, an uncommon or important type camp.

You're going to see volume rise.

It's going to bring new traders.

And it's usually driven off some type of big event or some news thing, something that's happening that's

really driving the impact on that security and really impacting on there's a gap.

It could be an up or down, but there's a big gap that's coming.

And infrequency marks the start of a new trend.

When you have a breakaway gap and I'll show you this visually, what those look like in a moment here.

But when you have that, that can mark the start of a new trend.

There's a major change coming.

There's a major change in your chart that you'll see.

You might see that the white the daily trading range or the high low starts to widen.

You might see an increase in indeed volatility with lots of things being sold high and low all throughout

the day.

Also, we mentioned the much higher trading volume are good indicators that a breakaway gap is occurring.

And what happens is it's actually going to break through.

Support and resistance levels can help confirm a significant breakaway gap.

So your support level would be like low prices and resistance would be high prices.

And somehow it's breaking through something, breaking through some, you know, this trading range

of prices.

And that's why we call it a breakaway gap.

And it is a significant leap in terms of price.

And we'll take a look at that now and what to how to trade on that here visually.

So in this example, we have an upward gap, right?

We have a gap between days for and days of prices.

And what you're really looking for is a couple of things.

You know, ideally for a breakaway gap, you want to be really proportionally big in terms of the trading

range.

So, for example, if the normal range is, let's say, three dollars or whatever your currency is and

the gap is fifteen dollars as far as between the preceding day's high and low and the gap open then

opens up higher, that that might show you that something significant is going on.

There's a big gap in between the prices and the more significant the gap, the more impactful that is.

And more likely you might have a true breakaway gap.

Again, we have to wait till the end of the day to really confirm that it's a gap, that it doesn't

come down in price, like in this example and just overlap.

And then we don't have a gap at all.

If we look at this, we have this proportionally big in terms of the trading range.

There's a big jump up in terms of what was going on before between days four and five.

And you can see in the preceding days kind of confirm that as well.

And then also really identify a breakaway gap.

It occurs when price is only slightly trending or moving sideways.

There's not much going on.

And then, boom, it happens.

You know, it's not like there's some big, massive trend.

And these have us a little breakaway gap, but it's already part of a massive trend.

That's not a true breakaway.

There's something else going on that's going on.

But if you look at like here in this example, you can see where prices are they one and two, three

and four.

They're up or down there.

Know there's there's no significant trend or it's kind of moving sideways.

And then there's a big leap up.

If anything, you might say, well, between two and four, there might have been a little bit of a

downtrend.

And then also and boom, there's a big gap upwards today.

Five something had caused that.

So when you're looking at interpretation of these, let's let's look at this one here.

This is an example of an upside gap, as we know.

So there's something happened.

Some good news creates demand and people want the stock badly or the security badly, and they're willing

to pay higher prices to get it.

You know, volume noticeably is volume is typically noticeably higher than usual.

If we were to put volume along the bottom of this and we look at some other charts later, you'll see

that.

But if we had volume here, you usually see a spike or a dramatic increase in volume because people

there's some news overnight, some good news.

I it's like, oh, this looks like a good security.

I want to get in here.

And a lot of people are getting in now and they're willing to pay these higher prices right from the

start of the day.

And that's what's that's what helped create this big upside.

Out of the other way of looking at a breakaway gap, of course, is a downside cap.

And what that means is that current security holders, they want to get out of it.

They want to jump the security and sell it.

And they're even willing to accept low, even lower prices.

To do that, they're willing to go even lower than whatever was the low of the range the previous day.

They just want out.

And volume, again, is usually, but not always, but usually abnormally high in this case as well.

Again, there's some kind of event.

Something's happening.

There's a mass movement either up or down.

In this case, this would be a downside breakaway gap where there's been a significant kind of kind

of move here to sell the securities.

So either way, you're looking for these for these gaps and you're looking for these significant moves

for a breakaway gap as opposed to other gaps we're going to learn about.