Introducing the Gap Indicator

What It Means for Your Trades

In trading, not all moves are created equal. Some price movements carry real intent — others are just noise. The Gap Indicator is designed to help you tell the difference.

At its core, the Gap Indicator measures distance and efficiency. It evaluates how far price has moved relative to prior structure and momentum, translating that relationship into a clear, actionable strength metric. Instead of guessing whether a move has “room left,” the gap gives you a quantified answer.

Why the Gap Matters

A widening gap often signals momentum continuation — price is moving decisively away from congestion or prior balance. This is where high-quality trades tend to form. A shrinking or weak gap, on the other hand, can warn that price is stalling, rotating, or losing conviction.

In practical terms, the gap helps you:

• Identify strong vs. weak moves

• Avoid chasing late or exhausted price

• Gauge whether a signal has follow-through potential

• Add context to entries, targets, and exits

How Traders Use It

The Gap Indicator works best as a confirmation tool, not a standalone trigger. When aligned with your core signals, it acts like a confidence filter — reinforcing trades with strength behind them and keeping you out when conditions are thin.

Think of it this way:
Price tells you where.
The gap tells you how well.

And in trading, that difference matters.

Used correctly, the Gap Indicator doesn’t just show movement — it reveals quality, helping you trade with structure, discipline, and intent.

Understanding the Gap Percentages

The Gap Indicator percentages measure momentum efficiency, not profit or probability.

• Low (0%–25%)
  Weak or developing momentum. Price is moving, but inefficiently. Follow-through is less reliable.

• Mid-Range (50%–75%)
  Healthy momentum. Price is moving cleanly away from structure. This is often the most tradable zone.

• High (75% )
  Strong expansion and conviction. Continuation is possible, but late entries require caution.

• Negative (Below 0%)
  Momentum is collapsing or reversing. Price is moving back against the prior direction.

The Gap Indicator is best used as confirmation, helping you judge how well the market is moving when a signal appears.