Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
Have done some reading and thinking of the subject
Yes in the subway :)
and maybe in shortterm trading if the gap is caused by a situation indicative of a momentum peak or bottom ( exhaustiongap ) and unexperienced traders chasing the market by hybris with market orders.
A pricegap represent a pricerange were no orders have been filled in the short term , due to this there is by defenition no support or resistance within this range so if there is no new situation for the underlying market
to set the marketprice at another level than it has been it should be filled with i high probability if the market is in or near a momentum top or bottom.
On the other hand if there is new regulation or market situation and this is well communicated to the market participants the gap just represent a logic adjustment of the price to the new situation.
Trying to find the cause of the gap seems to be the way to handle it ?