A price lap is a powerful indicator that a stock’s price trend is gathering strength.
Traders of any experience level know that to compete you have to know how to read price action. Technical analysis was created to help traders master price action. Methods such as Elliot Wave, trend-trading, price pattern analysis, and more to help you understand price action. One such pattern to master is the “lap”.
What is a price lap?
A price lap is when a price bar opens above or below the previous price bar’s price range. An open above the previous price bar’s close for a bullish move and below the close for a bearish move.
A price lap can be significant at key price points. Depending on the context of the price action it can signal an entry or reveal the strength of the trend.
So, which points are those key levels?
Modern technology has made the stock market more accessible than any other time in the financial history of the world yet traders still struggle to find worthy investments to trade. Despite having access to advanced charting packages, real-time news, and instant access to a company’s financial performance, finding worthy stocks to trade continues to be as much of a challenge in the 21st century as it was in the past centuries.
Explanations as to why this is so difficult are as numerous as the challenges that they attempt to explain away. Like the Hydra, you chop off one head only to have another head grow back to take its place, and you’re left with more unanswered questions leading to frustration and overwhelm.