This is a trading item or a component that was created using QuantShare by one of our members.
This item can be downloaded and used by QuantShare Trading Software.
Trading items are of different types. There are data downloaders, trading indicators, trading systems, watchlists, composites/indices...
You can use this item and hundreds of others for free by downloading QuantShare.
Top Reasons Why You Should Use QuantShare:
Works with US and international markets (stock, forex, options, futures, ETF...)
Offers you the tools that will help you become a profitable trader
Allows you to implement any trading ideas
Exchange items and ideas with other QuantShare users
Our support team is very responsive and will answer any of your questions
We will implement any features you suggest
Very low price and much more features than the majority of other trading software
The Gap composite is a market breadth indicator that measures and compares the number of stocks that gapped up and those that gapped down. This market indicator calculates, for each trading bar, the average of the gap difference formula of all stocks in the universe. The Gap difference formula consists of subtracting "GapUp" (function returns 1 if there is a gap up, 0 otherwise) to "GapDown".
Interpretation:
0: If the gap composite value is equal to zero then this means that bullish and bearish stocks are of equal strength. The number of stocks gapping up is exactly the same as the number of stocks gapping down.
Higher than 0: The number of stocks gapping up is higher than the number of stocks gapping down. A value of 10% tells us that there are 10% more stocks that had a gap up that those that had a gap down.
Lower than 0: The number of stocks experiencing a gap down is higher than the number of stocks experiencing a gap up.
100: A gap up occurred in all stocks during the current day.
-100: A gap down occurred in all stocks during the current day. It is very unlikely that an extreme value occurs.
The Gap market breadth indicator should be used in addition with a smoothing technical indicator such as the simple moving average.
A divergence between the gap composite and a market index such as the S&P 500 or NASDAQ is usually an indication that a market reversal is imminent. Prepare your stops and be ready to close your positions if such divergence occurs.
Trading financial instruments, including foreign exchange on margin, carries a high level of risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in financial instruments or foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
