Common Gap

Posted in Finance, Accounting and Economics Terms, Total Reads: 560
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Definition: Common Gap

On a price chart for an asset if some gaps are spotted then it is called a common gap. They are also known as trading gaps or area gaps.


These gaps are very common and are basically driven by normal market forces.

Common gaps are detected if there is a non-linear jump from one point to another. Compared to other types of gaps common gaps are generally filled quickly (generally within two days).

 

An image representing common gap in a price chart


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