Technical Definition
A Runaway Gap, also known as a Measuring Gap, is a price gap that occurs in the middle of a strong existing trend, either bullish or bearish. Unlike a Breakaway Gap, it does not signal trend initiation but rather trend acceleration. The gap reflects increasing conviction and broad participation as the trend gains strength.
The train has left the station and is picking up speed. The runaway gap is when the engine goes full throttle. It tells you the move isn't over; it's just getting started.
The existing trend is strong and widely accepted
Market Psychology
Trend Acceptance
Early trend participants are already positioned. Skeptics begin to acknowledge the trend’s validity.
Momentum Recognition
More traders notice the strength and attempt to enter, increasing directional pressure.
Urgency and FOMO
Fear of missing out drives aggressive participation. Orders cluster in the direction of the trend, causing the gap.
Trend Expansion
As price holds beyond the gap, confidence increases and the trend continues with renewed force.
Pattern Anatomy
Established Trend
Price is already moving clearly in one direction with higher highs and higher lows (bullish) or lower highs and lower lows (bearish).
Gap Formation
Price opens significantly above the prior close in an uptrend or below it in a downtrend, leaving a visible gap aligned with the trend direction.
Continuation Zone
After the gap, price often continues trending without immediately filling the gap. The gap area frequently acts as dynamic support or resistance.
Pattern Rules
Prior Trend
A clear and established trend must already exist.
Direction
The gap must occur in the direction of the prevailing trend.
Position
The gap should not break out of a long consolidation (that would be a breakaway gap).
Volume
Volume often expands during or after the gap.
Continuation
Price should continue trending after the gap.
Tactical Execution
Buy on gap continuation
Stop loss below gap fill
Target measured move
Signal Confirmation
- Price acceptance beyond the gap
- Continued higher highs or lower lows
- Expansion in volume after the gap
- Gap acting as support or resistance on pullbacks