OPEN-SOURCE SCRIPT
Indicator: Gap Finder [KL]
Updated
About gaps:
A gap is a “jump” in a security’s price between the Open and the Prior Close. Gaps are very common in stocks during opening hours, especially when accompanied by catalysts.
What this indicator does:
This script will identify gaps that remained unfilled for at least one candle.
It is very common for gaps to be filled on the first candle, these gaps are arguably less meaningful, so they are ignored by the indicator to reduce the number of lines drawn.
Applications:
Since most gaps eventually get filled, the question is a matter of when. If going with the trend, a trader will open a long/short position when seeing an up/down gap. When going against the trend, then short/long the stock on up/down gaps and consider taking profits when price returns to where the gap originally occurred.
Originally intended for 1D timeframes, but gaps can occur in all timeframes. Applications are limitless.
Release Notes
Set overlay=trueRelease Notes
UpdateS:- Added adjustable threshold (%) in settings. Gaps with distances below this benchmark will not be plotted.
Release Notes
Refactored, and added alerts.Release Notes
Removing lines associated with filled gaps, only showing unfilled gaps.Release Notes
Updated UI for settings.Open-source script
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.
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Disclaimer
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