Upside Gap Three Methods
Upside Gap Three Methods is a technical analysis tool used to identify potential reversals in the trend of a security. It is based on the idea that when the price of a security gaps up, it is likely to reverse and move back down. The tool is used to identify potential entry and exit points for traders. The three methods used in the Upside Gap Three Methods are the Gap Up, Gap Down, and Gap Continuation.
History of the Term
The Upside Gap Three Methods was first developed by technical analyst Thomas Bulkowski in the late 1990s. Bulkowski was looking for a way to identify potential reversals in the trend of a security. He noticed that when the price of a security gaps up, it is often followed by a reversal and a move back down. He then developed the three methods to identify potential entry and exit points for traders.
Comparison Table
| Method | Description |
|---|---|
| Gap Up | When the price of a security gaps up, it is likely to reverse and move back down. |
| Gap Down | When the price of a security gaps down, it is likely to reverse and move back up. |
| Gap Continuation | When the price of a security gaps up or down, it is likely to continue in the same direction. |
Summary
Upside Gap Three Methods is a technical analysis tool used to identify potential reversals in the trend of a security. It is based on the idea that when the price of a security gaps up, it is likely to reverse and move back down. The tool is used to identify potential entry and exit points for traders. For more information on this term, you can visit Investopedia, Investing.com, and other financial websites.
See Also
- Technical Analysis
- Price Action
- Support and Resistance
- Trendlines
- Moving Averages
- Relative Strength Index (RSI)
- Bollinger Bands
- Fibonacci Retracements
- Candlestick Patterns
- Volume Analysis
