Gap Trading Basics: Breakaway, Exhaustion, and Gap Fill
Understand stock market gaps, why they happen, when gaps fill, and how beginners should practice them safely.
· 5 min read · gap, stocks, volatility, day-trading
A gap happens when a market opens at a different price from the previous close. Stocks gap because news, earnings, analyst changes, macro events, or overnight order flow resets expectations while the regular session is closed.
Three common gap types
Breakaway gaps leave a range with strong participation. Continuation gaps appear in the middle of a trend. Exhaustion gaps happen late, after everyone has already chased. The type depends on context, not the size of the gap alone.
Gap fill is a tendency, not a law
Price breakout accompanied by a volume spike several times the average, visually confirming the move.
A gap fill means price returns to the prior close. Some gaps fill quickly; others never do. A gap with strong volume and trend alignment is less likely to fill immediately than a weak gap into resistance.
Beginner rule: wait for the first range
The opening minutes are noisy. Let the first range form, mark high and low, then judge whether price accepts above, rejects below, or rotates inside. Trading the first print is usually emotion, not analysis.