Measuring Daily, Intraday, and Brooks Price Gaps

Summary

The indicator described here tracks three definitions of an unfilled price gap and displays the remaining distance to closure as histogram bars. Daily gaps measure the space between a session’s close and the next open. Intraday gaps compare the shadows of consecutive candles, while Brooks gaps compare candles two bars apart. The user selects which gap definition to display with a parameter. Positive and negative bars distinguish the two gap directions, and separate outputs track short and long gaps for the intraday and Brooks variants.

The supplied logic identifies gaps, stores the relevant boundary price, updates the distance as prices move, and clears a gap when price reaches its closing level. It also includes hour-based conditions that limit when some gaps are tracked. This is a descriptive charting tool, not a tested entry or exit strategy: the page offers no performance evidence, asset-specific guidance, or assessment of whether gaps tend to close. Its session assumptions may need adjustment for other markets or time zones.

Key ideas

• The indicator tracks daily, consecutive-candle intraday, and two-bars-apart Brooks gaps.
• A parameter selects which gap definition is displayed.
• Histogram direction indicates gap direction, while the values reflect remaining distance to closure.
• The logic clears a tracked gap once price reaches its closing boundary.
• The page provides no backtest or evidence that gap closure is a profitable trading signal.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.