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A gapfib is a tradable price pattern, discovered and developed by the owner of this site in 2007.  It's based on the study of gaps, price action that follows a gap, and Fibonacci retracement calculations.  The logic behind the pattern is that gaps, and the price action that follows, represents a specific type of market expression where a trader can project a target that is proportional to the length of the post-gap price action.

Specifically, the range of price action from the gap is measured, starting at the low of a gap up day to the highest high in the range of price prior to lower lows, or starting at the high of the gap down day to the lowest low in the range of price prior to higher highs.  Once the measurement is made, a target of -150% retracement is auto-generated on the chart.  There is statistical significance to the -150% price, and price often reaches and turns at that location.  This gapfib concept leverages mathematics directly against human/market behavior to identify good buy and sell areas.  Once a gapfib pattern is measured and in place, a trader should buy a bullish gapfib (or sell a bearish gapfib) at the 61.8% retracement area and target the -150% projection.  By doing this one trades with excellent risk/reward parameters, has a clear stop location, and a clear target price.  The method leverages good trade practice of buying weakness at support, selling strength at resistance, letting winners run, and cutting losers short.  The method can be modified to suit each trader's risk/reward preferences, with variations to entry and stop.