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Exhaustion Gap

The Exhaustion Gap appears at the end of a trend, signaling the trend is about to end and reverse.

Pattern Details

Category

reversal

Success Rate

65%

Average Move

-10%

Duration

End of trend

Pattern Structure

Pattern Structure
Key components that define this chart pattern
  • 1
    Strong trend has extended
  • 2
    Gap appears at end of trend
  • 3
    Reversal or sideways movement follows

Trading Rules

Trading Rules
Essential rules for trading this pattern successfully
  • ✓
    Prepare for reversal
  • ✓
    Wait for reversal confirmation before entering
  • ✓
    Target = Gap width may be filled
  • ✓
    Beware of fakeouts
Trading Tips
  • High volume but not sustained
  • Often accompanied by divergence
  • Carefully distinguish from runaway gap

Statistics

Breakout Statistics
Bullish Breakout35%
Bearish Breakout35%
Performance Metrics
Average Rise+8%
Average Decline-10%
Pullback Rate22%