I've been trying to understand why gaps in charts happen. For example when there's a gap up at the beginning of the trading day, you can see the price movement during after hours trading and then once 9:30 hits bam a gap in the chart. Now I know the explanation for this is that many buyers are purchasing the stock in a short amount of time (right when the market opens) which causes the gap up but let's say the stock moves from 10 to 15 right around 9:30, is there really no transition that can be recorded on a chart from 10 to 15, is every buyer just purchasing the stock at 10 one second and the next they're like "oh it's 15 now alright" and what determines where the gap stops if there's no transition. Would this transition be shown with something like 5 second candle sticks? If everyone is trying to buy at 10 then how can the price even gap up if nobody can react to that quick of a movement? Is everyone in this situation buying with market orders and then getting burned when their order gets filled above what they thought they were purchasing at?
Sorry for the wall of text, I've tried to find a clear answer to all of this via google but I figured someone on reddit would be able to do a way better job at breaking this down to its most basic and clear explanation
Thanks for the help
Submitted February 14, 2018 at 02:27PM by jujujordu http://ift.tt/2EH3eEY
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