Gap Open Detector

Indicator Note: Gap Open Detector
What This Indicator Does

This indicator helps you spot significant price gaps at the start of new candles compared to the previous candle’s close. A gap means the current candle’s opening price is noticeably higher or lower than the previous candle’s closing price.

Gap Up: The new candle opens above the previous candle’s close.
Gap Down: The new candle opens below the previous candle’s close.

The indicator highlights these gaps with colored candles:

Green Candle: Gap Up detected.
Red Candle: Gap Down detected.

How to Use the Indicator:

This indicator gives Best Results on Hourly Candles:
This indicator works best on hourly charts (1-hour time frame). It is especially useful for spotting gaps at the start of the next day or after a significant break in trading.

Wait for Confirmation:
After a gap is detected at the open, wait for the candle to form. Ideally, wait for one hour (until the hourly candle is complete) to confirm the candle’s direction and strength before taking any action.

Customize Gap Size:
You can set the minimum gap size using either points or percentage:
Points: Enter the minimum number of points for a gap to be considered significant.
Percentage: Enter the minimum percentage change for a gap to be considered significant.

This flexibility allows you to adjust the indicator to suit different markets and volatility levels.
Trading Logic

If there is a Gap Up and the one hour candle is green:
Buy Option: Consider initiating a buy (long) position.

If there is a Gap Up but the one hour candle is red:
Sell Option: Consider initiating a sell (short) position.

If there is a Gap Down and the one hour closing candle is red:
Sell Option: Consider initiating a sell (short) position.

If there is a Gap Down but the one hour candle is green:
Buy Option: Consider initiating a buy (long) position.

Important Tips
1. Patience Pays: Always wait for the hourly candle to close before making any trading decisions based on the gap.

2. Next Day Open: This strategy is especially effective for catching gaps at the start of a new trading day or after a market break.

3. Visual Cues: The indicator gives you a simple visual cue to spot potential trading opportunities.

4. Flexible Settings: Set your preferred gap size in points or percentage to match your trading style.