Trading Gaps Cheat Sheet $SPY $QQQ $MSFT $GLD $SLV

CHEATSHEET for TRADING GAPS:

4 types:

1. Common Gap (usually $SPDR S&P 500 ETF Trust(SPY)$ $Invesco QQQ(QQQ)$ on intraday charts)

Small gap in range-bound markets. Usually low volume and gets filled quickly.

2. Breakaway Gap ( $Microsoft(MSFT)$ earnings made one last week)

Appears at the end of consolidation. Starts a new trend. Often does not fill early.

3. Runaway (Continuation) Gap (GLD on the way up)

Forms mid-trend. Confirms strength and momentum. Trend continuation signal.

4. Exhaustion Gap ( $SPDR Gold ETF(GLD)$ and $iShares Silver Trust(SLV)$ near the top)

Occurs late in a trend. Often followed by reversal after momentum fades.

4 Rules of Gaps (How to Trade Them Properly)

Rule 1: Volume Confirms the Gap

High volume = meaningful (breakaway/runaway).

Low volume = likely common gap.

Rule 2: Context > Gap Itself

Location matters more than size.

Breakouts and trends = trade with the gap.

Late trends = be cautious.

Rule 3: Don’t Fade Strength Too Early

Never short a breakaway or runaway gap immediately.

Wait for exhaustion signals first.

Rule 4: Know Which Gaps Fill

Common & exhaustion gaps often fill.

Breakaway & runaway gaps usually don’t trade continuation.

For SG users only, Welcome to open a CBA today and enjoy access to a trading limit of up to SGD 20,000 with unlimited trading on SG, HK, and US stocks, as well as ETFs.

🎉Cash Boost Account Now Supports 35,000+ Stocks & ETFs – Greater Flexibility Now

Find out more here.

Complete your first Cash Boost Account trade with a trade amount of ≥ SGD1000* to get SGD 688 stock vouchers*! The trade can be executed using any payment type available under the Cash Boost Account: Cash, CPF, SRS, or CDP.

Click to access the activity

Other helpful links:

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.