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JLS

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Alias Born 12/14/2004

JLS

Re: rotor1 post# 17508

Sunday, 03/05/2017 10:51:39 PM

Sunday, March 05, 2017 10:51:39 PM

Post# of 31124
Exhaustion gaps,

Since futures are currently pointing down for Monday, it's likely an exhaustion gap.

Exhaustion gaps according to Bulkowski:
Happens at the end of a trend on high volume. The gap is not followed by new highs or lows, and the gap may be unusually wide. After the gap, price consolidates or reverses direction. Commonly occurs after continuation gaps. Exhaustion gaps usually close within a week.

Percentage of gaps closing within a week, upward breakouts:
Area gaps: 89%
Breakaway gaps: 2%
Continuation gaps: 4%
Exhaustion gaps: 61%


Trading tip from Bulkowski:
If an unusually wide gap occurs, it may mark the end of the trend (immediately or within a few days). Violent reversals can follow an exhaustion gap, so consider taking a position in the new direction.

http://thepatternsite.com/gaps.html

Questions:

How does Bulkowski define trend?
What does unusually wide mean?
What does high volume mean?

Without numerical definitions for all terms, what do all of those percentage values actually mean?

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