Measuring Gap (Continuation / Runaway Gap)
A Measuring Gap (also known as a continuation gap or runaway gap) is a type of price gap that occurs within an established trend, typically roughly mid-move, signaling significant momentum continuation. It reflects strong conviction by participants who join the existing trend, leading price to skip levels with little or no trading. These gaps are used to project further price movement and validate trend strength.
Definition
A Measuring Gap is a price gap that occurs during an ongoing trend — usually in the middle of a sustained directional move — where price opens beyond the previous period's range with no overlapping traded prices. This gap indicates that trend momentum is strong and often suggests the move will continue. Because the gap often aligns with institutional interest or surge participation, it may be used as both a confirmation and a projection tool for how much further price could travel based on the context of the trend preceding it.
Why It Matters
Measuring Gaps indicate strong continuation ability of an existing trend and help traders gauge trend strength and possible directional targets. These gaps are less likely to fill quickly compared to common gaps and often signal that market participants are rapidly joining the move — a condition where smart money and momentum players are dominating price action.
How to Identify
- Locate a clear trend (uptrend or downtrend) with successive higher highs/higher lows or lower highs/lower lows.
- Identify a gap where the current candle's open and close do not overlap with the prior candle's range — leaving an empty space in between (no traded prices).
- Confirm the gap is not at the start of the trend (breakaway) nor at the end of the trend (exhaustion); instead it occurs within the established move.
- Look for continued price progression in the same direction after the gap — ideally accompanied by strong volume or follow-through momentum.
- Measure the gap's mid-trend position: measuring gaps typically occur roughly halfway through the major move rather than at structural breakout or exhaustion zones.
How to Trade
- In an uptrend, a bullish measuring gap up signals a high-probability continuation — traders can take or add to longs in the direction of the trend after the gap forms and confirms with follow-through candles.
- In a downtrend, a bearish measuring gap down signals continuation to the downside — traders can take or add to shorts after gap confirmation.
- Targets may be projected by measuring the preceding price swing before the gap and adding that distance to the gap's breakout point to estimate further trend distance.
- Use additional confirmation such as break of structure, MSS/BOS, or PD array confluence to avoid early or false entries.
- Use tight risk entry around the gap edge area and place stops just beyond the opposite side of gap structure to respect the trend context.
Common Confusions
Measuring gaps occur within an active trend mid-move, whereas breakaway gaps occur at the onset of a new trend breakout from consolidation or range. Look at structure context and preceding price pattern.
An exhaustion gap signals weakening and possible reversal toward a gap fill, while a measuring gap signals trend continuation with less propensity to fill quickly. Volume and progression afterward help distinguish them.
Not all gaps are structural continuation signals. Gap type — common, breakaway, measuring, exhaustion — must be identified before assigning predictive meaning.
Pre-Trade Checklist
- Established trend identified?
- Gap at approximate midpoint of move?
- Displacement candle present?
- Equal-distance target projected?
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Educational resource only. Not financial advice. Trading involves substantial risk of loss.