Gap-and-go versus gap fill — classifying the gap by cause and size before deciding anything.
Key takeaways
- Classify the gap by cause: news-driven, sentiment-driven or mechanical.
- Size relative to average range matters more than absolute points.
- Wait for the opening range to complete before committing.
A gap is simply overnight information expressed in one print. The useful question is what produced it. A results-driven gap in a single stock has a different follow-through profile from an index gap caused by an overnight global move.
Measure the gap against the instrument's average daily range rather than in points. A 0.3% index gap is inside normal noise; a 1.2% gap is a regime statement and usually sets the day's direction bias.
Structure beats prediction. Let the opening range — the first five or fifteen minutes — complete, then trade the break of that range in the direction of the gap, or the failure of it back through the prior close. Both are rule-based and both have defined invalidation.
Reduce size on gap days. Ranges are wider, spreads are worse in the first minutes, and stops placed at normal distances are hit by ordinary noise.
Related guides
Strategy
Swing trading NSE stocks: holding periods, risk and position sizing
Multi-day trades let you use daily charts and avoid screen addiction — but overnight gaps change how you must size.
Strategy
Scalping in Indian markets: a cost-first reality check
Dozens of trades a day only works when your edge per trade clears the cost stack. Here is the arithmetic before the strategy.
Strategy
Taking profits: the decision that separates similar traders
Fixed targets, trailing stops and partial exits — matching the exit method to the strategy's return profile.
Strategy
Why breakouts fail: traps, liquidity and false moves
The mechanics behind failed breakouts, and how to trade the failure instead of being caught by it.
Your edge deserves
real capital
Start today from ₹1,499, trade Equity, F&O, Currency or MCX your way, and get paid in rupees on exactly the terms you were shown on day one.
Trade · Prove · Get Funded — evaluation fee refunded with your first INR payout.