Gap Statistics

The Gap Statistics by Zeiierman is an advanced trading indicator designed to monitor, analyze, and visually present price gaps on trading charts. These gaps, which occur when the price jumps up or down from the previous close to the next open, create a discontinuity in the normal price pattern. This indicator provides extensive statistics on these gaps, aiding traders in making informed decisions based on historical gap behavior.

How the Gap Statistics Works

The Gap Statistics indicator tracks all identified gaps using arrays and user-defined types, storing details like their size, direction, and whether they have been filled. It continuously monitors the price to check if any previously identified gaps are filled. A gap is considered filled if the price moves back into the gap area.

Usage of the Gap Statistics

Traders can utilize this indicator in several ways:

• Classifying Gaps: The indicator helps classify gaps into four main types:
  • Common Gaps: Likely to get filled quickly as they are not associated with major news.
  • Breakaway Gaps: Signal the beginning of a new trend at the end of a price pattern.
  • Runaway Gaps: Occur in the middle of a trend, indicating a surge in interest.
  • Exhaustion Gaps: Appear near the end of a price pattern, signaling a final attempt to hit new highs or lows.
• Statistical Analysis: Provides comprehensive statistics on gaps, including their size, direction, and the frequency of them getting filled.
• Performance Tracking: Tracks the number of bars it typically takes for a gap to fill, providing an average timeframe for gap closures.

Features of the Gap Statistics

Key features include:

• Gap Tracking: Monitors and records all gaps, detailing their size, direction, and fill status.
• Gap Filling Monitoring: Continuously checks if any gaps are filled, updating the statistics accordingly.
• Statistics and Alerts: Calculates various statistics like the total number of gaps, filled gaps, average time to fill gaps, and the percentage of filled gaps. It also generates alerts when new gaps are identified or existing gaps are filled.
• Settings: Options to display all gaps, active gaps, or none, and toggle the display of gap sizes.

Conclusion

The Gap Statistics is a powerful tool for traders looking to leverage gap analysis in their trading strategies. By providing detailed statistics and real-time monitoring, it enhances the trader's ability to understand and predict market movements based on historical gap behavior.