Analyse Trading
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Gap

A gap is a jump in price between one candle's close and the next one's open, with no trading in between, often after a weekend.

On stocks and indices, gaps are common at the open, after earnings or news released outside trading hours. In forex, which trades continuously, they mostly appear at the Sunday evening reopen, when major news broke over the weekend.

Traders distinguish common gaps, often filled quickly, breakaway gaps at the start of a move, runaway gaps in the middle of a trend and exhaustion gaps at the end of a move.

For you, the main danger is a skipped stop: in a gap, your stop is filled at the first available price, sometimes well beyond your level.

The full lessonGaps: when price jumps over a levelCommon, breakaway or exhaustion gaps: how gaps form on stocks, indices and weekend forex, whether they really fill, and how to protect your stop from them.← Full glossary