Gap fill occurs when price retraces to trade through the void left between a prior session’s close and the next session’s open, closing the empty range on the chart. Traders monitor unfilled gaps as potential price targets because markets have a statistical tendency to revisit those regions — but that tendency varies sharply by gap type, and applying a blanket “gaps always fill” rule is one of the most common and costly misapplications in technical analysis.
Key Takeaways
- Common gaps (small, no-catalyst) fill within 5 sessions roughly 70-75% of the time; breakaway gaps driven by earnings fill within one month less than 30% of the time.
- Classify the gap type before entering any trade — fill probability, entry method, and stop placement differ significantly across common, breakaway, runaway, and exhaustion gaps.
- Define your invalidation level before entry: the 50% midpoint of the gap or the prior session’s close are standard levels; a partial fill that reverses is a high-probability momentum trap.
How Gap Fill Works
A price gap appears on a chart when a session opens materially above or below the prior session’s close, leaving a range with no traded prices. A gap fill completes when price subsequently retraces and trades through that entire empty range.
The four canonical gap types carry different fill probabilities:
Common gaps form inside a trading range on low relative volume with no fundamental catalyst. These fill 70-75% of the time within 5 sessions and are the primary target for gap-fade strategies.
Breakaway gaps occur when price escapes a consolidation zone on high volume, often driven by earnings or macro news. Fill probability within one month is under 30% — fading these against the catalyst direction is a low-odds trade.
Runaway (continuation) gaps appear mid-trend, confirming trend strength. They fill infrequently in the near term; the gap level often converts to support or resistance on any subsequent retest.
Exhaustion gaps occur late in a parabolic move, frequently on 2-3x average volume, as the last buyers (or sellers) pile in. These have the highest short-term fill probability of all gap types and represent the cleanest fade setup.
Gap size as a percentage of price matters. Gaps under 1% in large-cap NYSE/NASDAQ stocks fill faster than gaps above 3% in volatile small-caps. Pre-market volume and the presence of a fundamental catalyst are the two most reliable pre-open filters before committing to any gap-fill trade.
Practical Example
Breakaway gap — do not fade: AAPL reports earnings and beats by $0.10 EPS. It closes at $192.00 and gaps up to $201.00 on the open (+4.7%), leaving a gap zone from $192 to $201. A trader fading this expects a fill to $192.00 and shorts at $200.00 with a stop at $202.50. AAPL holds $198.00 and grinds higher — the stop triggers for a $2.50 loss per share. The fundamental catalyst made this a breakaway gap, not a fade candidate.
Common gap — high-probability fade: SPY closes at $525.00 on a quiet Tuesday with no scheduled economic data. Wednesday morning, mild overnight futures weakness pushes the open to $522.80, a -0.4% gap with no catalyst. A trader buys the open at $522.80 with a stop at $521.50 (below the prior day’s low) and a target of $525.00 (full fill). By 10:30 AM, SPY trades to $524.50, filling 78% of the gap. Risk: $1.30. Reward to target: $2.20. Reward/risk ratio: 1.7:1 on a no-catalyst, sub-0.5% gap where intraday fill probability runs 65-70%.
A gap fill happens when price trades back through the empty zone left between one session’s close and the next session’s open. Common gaps fill about 70 to 75 percent of the time, but gaps caused by earnings news fill far less often and should rarely be faded.
Common Mistakes
- Fading every gap regardless of type. Applying one rule to all gaps ignores that breakaway gaps driven by a $0.50 EPS beat have fundamentally different fill odds than a quiet overnight drift of 0.3%.
- Ignoring pre-market volume. High pre-market volume on a gap-up signals institutional participation — a warning sign for any fade. Low pre-market volume on a small gap is a green light for the common-gap-fade setup.
- Skipping the invalidation level. A partial fill that reverses is a known trap. Set the stop at the prior session’s close (for a full-fill trade) or at the 50% midpoint of the gap before entry — not after the trade starts moving against you.
- Oversizing based on “high probability.” Even a 70% fill rate means 3 out of 10 trades lose. Position size must reflect that gap-fill setups, while repeatable, are not guaranteed.
How JournalPlus Tracks Gap Fill
JournalPlus lets traders tag entries with setup types including gap-fill, making it straightforward to filter historical trades by gap type and measure actual fill rates from personal data rather than relying on market-wide statistics. The opening range and volume fields in each trade log help confirm whether a gap met the low-volume, no-catalyst criteria before entry — the two factors most predictive of a successful common-gap fade.
