Four gap types worth naming before the open
Common, breakaway, runaway, and exhaustion gaps — labels that change how you size risk when the overnight void is large.
Most traders see a void between yesterday’s close and today’s open and feel urgency. Naming the gap first slows that impulse.
Common gaps appear inside a quiet range, often after light overnight news. They fill frequently enough that fading them with tight invalidation is a familiar exercise — not a rule, a tendency you measure against your own market.
Breakaway gaps leave a consolidation with rising volume interest. Treating them like common gaps is how accounts get clipped. In training we mark the prior range high or low and ask whether the open is still “inside” the old structure.
Runaway (measuring) gaps show up mid-move. Chasing them at the open without a retest plan is a different decision from waiting for the first fifteen-minute pullback.
Exhaustion gaps widen late in a trend and often reverse within days. They look dramatic at 10:00; they look different when you overlay average true range.
In the Gap Analysis Intensive we practise labelling historical ASX opens with the subsequent bars hidden. The habit transfers: you write the type in the journal before you write the order.