The new range holds, then advances. Read the actual pattern.
T3 Live / Pristine · Additional study
← Gap basicsGap fallacies.
Five shortcuts. Five better questions.
A gap tells you where the regular session opened relative to the prior close. The shortcuts below turn that observation into a prediction. Use the illustrations to see what each shortcut leaves out.
Every gap will fill.
Source p. 19 ↗A possible fill has no deadline.
Some gaps fill quickly. Others remain open throughout the period you are trading. Even a later return to the prior close would not justify holding an opposing position through a large move first.
Read the illustration
The first gap’s prior close is not revisited anywhere in the displayed window. The pullbacks stay above it.
Better question
Define the reference and the time window. Ask what price is doing now, rather than treating an eventual fill as a target it owes you.
Keep the distinction clear
Here, a full fill means price trades back to the previous regular-session close. A partial retracement or a return to the edge of a range void is a different measurement. This example cannot establish how often gaps fill.
Read this chart as text
After a recent decline, price gaps from a prior close of 89 to an open of 100. Every later candle in the shown 28-session window stays above 89. Price eventually advances to 130. This says nothing about prices beyond the displayed window.
Gap up means bullish. Gap down means bearish.
Source p. 20 ↗Opening direction describes one price change.
A higher open can hold and advance, or be sold. A lower open can continue lower, or be bought. Read the preceding bars, nearby levels and the response after the open before assigning a trading bias.
Read the illustration
The higher open sits inside an existing decline and is sold during the session. The gap’s sign alone misses that context.
Better question
Separate three observations: where it opened, what came before it, and whether the new prices hold.
Keep the distinction clear
The opposite shortcut is a fallacy too. A gap up is not automatically bearish, and a gap down is not automatically bullish. Compare the actual chart context.
Read this chart as text
Price first rallies from 20 to 31, then falls to a prior close of 13.4. It gaps up to 16.3 but closes that day at 14.4. Later sessions settle near 12.8. The opening direction and the later response differ.
Good news tells us the stock should rise.
Source p. 21 ↗The reaction can disagree with the story.
The source illustrates favorable news beside a large down candle. A positive headline does not supply an entry, invalidate selling or determine how the session will finish. Check the price response instead of translating the headline’s tone into a trade.
Read the illustration
This candle closes below its own open. It still closes above the prior day. Candle color and the change from yesterday answer different questions.
Better question
Describe what price accepted or rejected after the open. Keep that observation separate from your interpretation of the news.
Keep the distinction clear
The lesson is about using news tone as a directional shortcut. It is not a claim that events never matter. The course separately identifies situations such as cash buyouts and ex-dividend adjustments as special context.
Read this chart as text
The prior sessions rise to a close of 18.8. On an illustrative positive-news day, price opens at 21.5, trades above 21.5 and then closes at 19.7. That is a down candle, even though the close is still above yesterday’s close. No following session is shown.
A huge gap is extended, so it should fill.
Source p. 22 ↗Distance is visible. Exhaustion needs evidence.
A large overnight change is not the same as a long series of advancing regular-session bars. Gap percentage or distance from an average cannot prove that buying is exhausted or that a retracement must follow.
Read the illustration
The opening jump is large relative to the prior price. It consolidates above the old range and advances again in this composed example.
Better question
Evaluate the preceding move, the new range and a qualifying pattern. Size alone supports neither fading the gap nor chasing it.
Keep the distinction clear
This does not make large gaps safer. A changed price range can make nearby references less useful. Treat the chart’s structure and your risk limits as separate checks.
Read this chart as text
A quiet range ends at a close of 5.2. The next session opens at 15.2, about 192% higher. After some consolidation, price advances to 24. The prior close is not revisited in this illustration. The example is not a measured probability of continuation.
The opening imbalance gives an easy direction.
Source p. 23 ↗A new opening price is not a continuation promise.
The course distinguishes the repricing into the open from a useful directional read afterward. The gap alone does not tell us whether buying or selling will persist. The subsequent pattern still has to support a bias.
Read the illustration
The schematic below starts at the same higher open. Either a holding response or a failed response can follow it.
Better question
Mark the opening reference, watch the response and identify the evidence that would change your read.
Keep the distinction clear
The source’s language about balance at the open is a teaching model, not a claim that real order flow becomes perfectly balanced or that an auction imbalance predicts every later trade. No order-book data is represented here.
The higher opening range is rejected. The same gap sign gives a different response.
All candles, volume and price paths are independently composed illustrations, not historical OHLC or traced source charts. The 20 SMA and 200 SMA use complete trailing close windows, including 199 earlier synthetic closes. Example outcomes explain a concept; they do not estimate how often it occurs.
Put the distinctions to work
Read the context. Check the response.
The extended test includes these five fallacies and Sami’s bonus gaps in separate chapters.