Gap Fills: Myth and Reality

“Gaps always fill” is one of the most repeated market sayings. Here is what our data showed about how often, and how fast, gaps of different sizes actually filled.

What “filling the gap” means

A gap up is filled when the price trades back down to the prior day’s close. A gap down is filled when the price trades back up to the prior close. The saying “gaps always fill” suggests every gap eventually closes, so you can trade on it. The truth is more nuanced.

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