Gap Trading Strategy: How to Trade Morning Gaps Profitably
Technical Analysis · 13 min · Published 2026-03-11
Learn gap trading strategies including gap-and-go, gap fill, and gap reversal setups. Complete guide by Rami Alame at Tradyom.
Gap trading exploits the price difference between one day's close and the next day's open. The three main strategies are gap-and-go (trading in the direction of the gap), gap fill (fading the gap expecting a return to prior close), and gap reversal (trading against the gap after failed continuation). Gaps occur due to overnight news, earnings, or after-hours trading.
Frequently Asked Questions
Do most gaps get filled?
Studies show approximately 70-80% of common gaps are filled within a few days. However, breakaway gaps at the start of major trends often don't fill for weeks or months.
What causes stock gaps?
Gaps are caused by overnight news (earnings, FDA decisions, analyst upgrades), economic data releases, pre-market and after-hours trading, and global market movements while US markets are closed.
What is the best time to trade gaps?
The first 30-60 minutes after market open provide the best gap trading opportunities. This is when volume is highest and price discovery is most active.