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The Gap Reversal pattern

The Gap Reversal pattern was first described by trader David Pieper in Traders magazine.

About the Gap Reversal pattern

This pattern...

is relevant on a 1-day chart.
only generates buy signals.
filters the buy signals by means of a moving average.

As the name indicates, this chart pattern includes an opening gap. The pattern defines a gap as a difference of at least 1% between yesterday’s close and this morning’s open. The close price of the gap candle must be above its open price. In addition, the close price of the gap candle must be above its mid-price.

This example shows a Gap Reversal pattern detected by the NanoTrader on Coca-Cola.

The Gap Reversal strategy and chart pattern.

This example shows a Gap Reversal pattern detected by the NanoTrader on the Dutch market index, AEX.