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For day traders to achieve success in the market, a sound strategy is required. For profits to be realized, discipline is needed. One of the best strategies that has proven to work over time is the Gap and Go strategy. To understand what Gap and Go strategy is all about, you need to understand some of its basic terms for examples gaps.

What are Gaps?
In trading, gaps refer to locations on the chart where the price of a security moves sharply in an upward or downward direction while little or no trading happens. This reflects a gap on the normal price pattern. Experienced traders have always interpreted and exploited these gaps for profit and that is what you are going to do with the Gap and Go strategy.

One thing you need to note is that gaps do not occur naturally. There are underlying factors that contribute to this phenomenon. For example when the earnings of a company are higher than expected, the said company will experience a rise in its stock value. This simply means that the price will start higher when the market opens than when the market closed the day before.

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