Breakaway Gap
Identification Rules
How to spot a breakaway gap on price charts and the specific criteria that define this pattern.
- Start with an existing Fair Value Gap
- Price must move away from the FVG without returning to mitigate it
- One of three scenarios must occur: Breaker Block formation, IFVG formation, or BPR formation
- For bullish BAG: price closes above bearish OB (BB), above bearish FVG (IFVG), or creates overlapping FVGs (BPR)
- For bearish BAG: price closes below bullish OB (BB), below bullish FVG (IFVG), or creates overlapping FVGs (BPR)
Confluence Factors
Additional signals like volume and momentum that strengthen breakaway gap setups.
- Breaker Block formation above/below the gap
- Inversion Fair Value Gap formation
- Balanced Price Range creation from overlapping FVGs
- Strong directional momentum after gap formation
Failure Modes
Common scenarios where breakaway gaps fail to follow through as expected.
- Price returns to mitigate the original FVG
- Supporting structures fail to hold
Common Mistakes
Typical errors traders make with breakaway gaps and how to avoid these pitfalls.
- Using Breakaway Gaps as entry points
- Identifying BAGs only in hindsight
- Expecting all FVGs to become Breakaway Gaps