How to Predict Breakaway Gaps

Breakaway Gap

A breakaway gap occurs when the stock price begins trading in a new region (significantly higher or lower than the previous month or so) as a result of an abnormally high volume of trades. Because the gap occurs immediately as the market opens, getting in on the stock before the breakaway gap occurs is a highly profitable action. Most traders – myself included – get really excited to see a correctly-predicted breakaway gap, as it can often mean an immediate double or triple of your investment.

In this video, I explain my method of predicting breakaway gaps. Generally, your best bet is to compare rumors to news. When you find rumors that seem to be backed by facts yet have not appeared in the mainstream news, you might have found a breakaway gap on which to capitalize.

Sometimes a breakaway gap reverses within a few days or weeks, especially in the case of penny stocks (think pump-and-dump). So getting in and out on-time is an important aspect of trading breakaway gaps. You can also benefit from downward breakaway gaps buy shorting stock or buying put options.
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[DamonVerial]

How will you set yourself for financial success in 2020? Leave a comment below!

[videolane]

Thanks. Let's look for rumours. 👍

[enigmatictreasure]

do you show us how to make an option call with your "copy my trades" service? I don't know anything about options and would love to learn more.

[hmf]

Are there indicators that can be successfully used to predict opening gaps that would allow you to enter the trade before the day of the gap?

[ericnystrom]

What forums or message boards do you go to.Thanks,

[jaxondakota]

I don't understand how to use investorshub. I want to know how to find out what stock will go up the day before it gaps up. Your explaining after the fact. But i want to know how did you know what stock to look for before it gaps up. It's easy to explain a gap up after it happened. But what made you research the stock that went up from $1 to $11? There's hundreds and thousands for ticker symbols. There's a lot of stocks that go up throughout the day. This what is confusing and hard for me to figure out. Even the way you explained it you really didn't touch on what made you research that specific ticker beforehand. How do you find rumors on specific stocks that will drastically increase? Everything I research is after the fact. There has to be a solid formula!!!

[ericnystrom]

Good Video on break away gaps.  Keep the videos coming, learn something new every day.  I want to learn the fundamental analysis, the core fundaments on how to predict the price of a stock, to know its under valued or over valued.  A video on this will I think be very educational, or maybe you already have a class on this in Udemy.