Runaway (Measuring) Gap

Runaway (Measuring) Gap: The Ultimate Guide for CFD Traders

Updated: 2026-02-27 · Education-only (not investment advice)

Introduction: The Trend Accelerator

In the world of technical analysis, not all gaps are created equal. While a Breakaway Gap starts a trend, a Runaway Gap (also known as a Measuring Gap) occurs right in the middle of one. It is a powerful signal that the current trend is accelerating as more traders realize they are missing out and rush to enter the market.

For CFD traders, the Runaway Gap is one of the most useful patterns because it provides a mathematical way to project price targets. It acts as a "midpoint" of the move, allowing you to estimate how much further the trend might run. In this masterclass, we will learn how to identify these gaps and use them to set professional profit targets.

Pattern type: Continuation

The Anatomy of a Runaway Gap

A textbook Runaway Gap has the following characteristics:

• Existing Trend: The gap must occur within a well-established, strong uptrend or downtrend.
• The Gap: A visible "hole" on the chart where no trading took place.
• Volume: Volume is usually moderate to high. It doesn't need to be as extreme as a Breakaway Gap, but it should show sustained interest.
• No Fill: Runaway Gaps are almost never filled in the short term. They act as a "support/resistance floor" for the accelerating trend.

Market Psychology: The FOMO Surge

The psychology of a Runaway Gap is driven by "Fear Of Missing Out" (FOMO):

• Realization: Traders who were waiting for a pullback realize that the trend is too strong and isn't going to give them one.
• Urgency: They rush to enter at any price, creating a gap as the market "skips" levels to find available liquidity.
• Confidence: The gap shows that the prevailing sentiment is so strong that there is no need for the market to "retest" previous levels.

The "Measuring" Technique: Projecting Targets

The reason this is called a "Measuring Gap" is because it often occurs at the midpoint of a move. Here is how to calculate your target:

1. Measure the Distance: Calculate the price distance from the start of the trend (the initial breakout) to the start of the Runaway Gap.
2. Project the Distance: Add that same distance to the end of the gap.
3. The Result: This provides a high-probability target for where the trend might eventually stall or reverse.

Identification Checklist

• Strong Trend: Is the price already moving strongly in one direction?
• Mid-Trend Position: Is the gap occurring away from major support/resistance levels?
• No Fill: Does the price continue to move in the trend direction without looking back?

MT4/MT5 Execution & Technical Setup

To trade the Runaway Gap effectively on MetaTrader, follow this professional workflow:

1. Trend Identification: Use the 50-period SMA to confirm a strong trend. The price should be well above (bullish) or below (bearish) the SMA.
2. The Entry: If you are already in a trade, the Runaway Gap is a signal to add to your position (pyramiding). If you are not in, enter on the first minor consolidation after the gap.
3. Fibonacci Tools: Use the Fibonacci Expansion tool to align your "measuring" target with key Fib levels (like the 1.618).

Risk Management for CFD Traders

Trading an accelerating trend requires tight risk control:

• Stop Loss Placement: Move your stop-loss to just below the gap (for bullish) or above the gap (for bearish). The gap should now act as a "floor" that the price does not penetrate.
• Trailing Stops: Use a Parabolic SAR or a Chandelier Exit to trail your stop as the trend accelerates toward the measuring target.
• Avoid Over-Leverage: Even though the trend is strong, never increase your total account risk beyond your established limits.

Real-World Example: Trading the Runaway Gap

During the 2020-2021 bull market, many tech stocks exhibited classic Runaway Gaps. NVIDIA (NVDA), for example, would often gap up in the middle of a rally. By measuring the distance from the previous base to the gap, traders could accurately predict the next major resistance level where the stock would eventually consolidate.

Traders who used these gaps to set targets were able to exit at the "top" of the move before the eventual exhaustion phase began.

Conclusion: The Analyst's Verdict

The Runaway Gap is a gift for trend traders. It confirms that you are on the right side of a powerful move and gives you the mathematical tools to project where that move might end. When you see a gap in the middle of a trend, don't fear it—use it to measure your success.

Common Mistakes to Avoid

• Fearing the Gap: Thinking the move is "over" because of the gap. In reality, the gap often means the move is only half-finished.
• Ignoring the Trend: Mistaking a "Common Gap" in a sideways market for a Runaway Gap.
• Not Moving Stops: Failing to use the gap as a new support/resistance level to protect your profits.

Disclaimer

This content is for education only and does not constitute financial advice. CFDs are leveraged products and carry a high risk of loss. Always use a stop-loss and trade responsibly.