summary: gap fill and outside day reversal both start with a gap, but they target different levels — outside day reversal reaches the prior high/low (easier), gap fill reaches the prior close (harder).

price gaps away from the prior day's range at the open. example: yesterday closed at 100.50 (high 101.00, low 99.50). today opens at 98.80 — that's a gap down.

now price has two possible targets as the day unfolds.

outside day reversal requires price to touch the prior day's high or low — depending on which direction the gap moved.

on a gap down: the prior high was 101.00. price must rally back up to 101.00 to complete the outside day reversal. this usually happens within the first 2–3 hours. it's a closer target because it's only the prior day's high, not the prior close.

on a gap up: the prior low was 99.50. price must fall back down to 99.50 to complete the reversal.

outside day reversals hit more often because the target is closer.

gap fill requires price to reach the prior day's close, not just the high/low. this is a much deeper, farther target.

on a gap down: the prior close was 100.50. price has to fall from 98.80 all the way back to 100.50 to fill the gap. much harder than rallying to just 101.00.

real scenario to show the difference: gap down opens at 98.80. price rallies to 101.00 within the first hour (outside day reversal complete — market hit the prior high). but then it stalls and never falls back to 100.50 (prior close). so you get outside day reversal ✓ but gap fill ✗.

outside day reversals hit more often because the target is closer. gap fills hit less often because they require deeper penetration back into the prior range.

the difference is always there — gap fills require more price movement, so fewer of them complete.

on a bearish gap (gap down), you're watching two levels as the day unfolds:

1. prior day's low = outside day reversal target (high probability)
2. prior day's close = gap fill target (lower probability, requires bigger move)

some traders enter at the prior low and take partial profits, holding for a potential full fill. others skip the low entirely and wait for the close. both approaches are valid depending on your risk/reward preference.

if you're scalp-oriented, the high-probability outside day reversal target is your ideal entry (hit 7 out of 10 times). if you're willing to hold longer for bigger moves, wait for confluence signals that suggest a gap fill is more likely (check edgeful's gap fill report for your instrument and session).

scenario: complete gap fill in first candle. if the opening gap fully fills within the first 5-minute candle (price closes back inside the prior day's range), the gap fill algo doesn't trigger.

example: gap down opens at 98.80. within the first 5-min candle, price rallies and closes at 100.50 (prior close). gap already filled. gap fill algo: no trigger.

this is intentional — no trade setup exists because the gap already resolved. the algo is waiting for a setup where the gap hasn't filled yet, so there's an actual trade to make.