What a price gap means
A price gap is a jump on the chart where price moves from one level to another and no trades happen at the prices in between. On a candlestick chart, the new candle opens away from the previous close and leaves an empty space.
In forex, the most common case is the weekend gap. The market closes on Friday and reopens at a different price on Monday. Gaps also happen during the week, mostly around news.
For a trader, the price you see before the gap may never be available again. Orders waiting at levels inside the gap cannot be filled at those levels.
Why markets gap
- Weekend and holiday closures. Retail forex and CFD trading stops at the weekend, but news continues. Elections, central bank statements and political events can all happen while the market is closed. When it reopens, the first quote shows the new view of value. See weekends and holidays and trading sessions.
- Scheduled news. Interest rate decisions, inflation data and employment reports can move price faster than quotes update. Liquidity providers widen or pull their prices for a moment, and the next available price can be far away.
- Unscheduled events. Sudden political or economic shocks cause the largest gaps because nobody is positioned for them.
- Thin liquidity. When few buyers and sellers are active, such as at the daily rollover or on holidays, small orders can move price in jumps. See liquidity and volatility.
- Underlying market hours. Index and share CFDs follow their underlying exchange. A stock index can gap at the cash open after overnight news. See stock indices.
What a gap does to your orders
| Order type | What happens when price gaps through its level |
|---|---|
| Stop loss | Becomes a market order and fills at the next available price, which can be much worse than the stop level |
| Buy stop / sell stop entry | Triggers and fills at the next available price, often worse than planned |
| Take profit / limit order | Fills at the order price or a better one, because a limit never fills at a worse price |
| Stop-limit order | May not fill at all if price jumps past the limit |
The difference between your order price and the actual fill is slippage. A stop loss limits loss in normal conditions, but it does not guarantee the exit price in a gap. A stop-limit order controls the price, but you may stay in the trade.
What a gap does to margin
Your equity is balance plus or minus open profit and loss. Margin level is equity divided by used margin, shown as a percentage. When margin level falls to the broker's margin call level you get a warning. At the stop out level, positions are closed automatically. See equity vs balance, margin level, margin call and stop out.
In a gap, equity changes in a single step. Margin level can move straight from a comfortable value to below stop out with no warning in between. The stop out then closes positions at the first available price after the gap, not at the price where stop out was "supposed" to happen. The loss can be larger than the distance to your stop suggested, and on a highly leveraged account it can wipe out the balance. Leveraged CFD and forex trading can lose money fast, and gaps are one of the ways this happens.
Margin call and stop out levels depend on the broker and account type. If you trade with Exness, check the current levels in the Exness personal area or on the official site.
Fill in the empty fields to see the result.
Margin level = equity / used margin × 100%. Equity falls with the floating loss; the price for a level L solves balance + P/L = L × margin. Margin is taken at the entry price. In a gap the position can close at a worse price.
Gap risk examples
Use the calculator above for each case. Enter your own values, because every result depends on them.
Example: long position over the weekend. Enter your balance, leverage, position size in lots and entry price. The calculator shows the prices where margin call and stop out happen. Then compare those prices with the Friday close. If a Monday gap could reach that distance, the stop out price is not protection. Your position would close at the opening price.
Example: stop loss inside the gap. Enter the same position with your stop loss distance. Then enter an opening price beyond your stop as the new current price. The difference between the planned loss and the loss at that price is your gap exposure.
Example: several positions in related pairs. Pairs with a shared currency often gap in the same direction. Add the combined size to see how fast margin level falls when all of them move together.
Ready to try it on a real or demo account?
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Gap trading
Gap trading means building trades around gaps. Some traders expect a weekend gap to "fill", meaning price returns to the previous close. Others treat a large gap after news as the start of a trend. Neither outcome is certain. A gap can stay open for a long time, and spreads at the open are often wider, which raises costs. Test any idea on a demo account and read chart patterns for the terms.
Precise definitions for experienced traders
- Full gap: the new bar's low is above the prior bar's high, or its high is below the prior low.
- Partial gap: the open is outside the prior close but inside the prior bar's range.
- Common gap, breakaway gap, runaway gap, exhaustion gap: chart-pattern labels based on where the gap appears in a trend.
- Gap fill: price trades back to the pre-gap close.
- Quote gap vs chart gap: on broker charts, a gap can come from the feed. Bid-based charts can hide gaps that appear on the ask side when spreads widen.
Reducing gap exposure
General risk management points that apply:
- smaller position size and lower effective leverage before weekends and major news;
- extra free margin, so a gap does not reach stop out;
- awareness that stops are not guaranteed in gaps;
- knowing your instrument's trading hours, including crypto CFDs, which may follow different schedules.
Frequent questions
What is a gap in forex?
A jump between consecutive prices with no trading in between, most often at the weekend open or on news.
Will my stop loss protect me from a weekend gap?
It closes the trade, but at the first available price after the gap, which can be worse than your stop level.
Can a gap trigger a stop out?
Yes. Margin level can fall below the stop out level in a single step, and positions close at post-gap prices.
Do gaps always fill?
No. Some fill quickly, some stay open for a long time, and some never fill.
How do I estimate my own gap risk?
Enter your balance, leverage, position size and prices into the margin call calculator on this page and test opening prices beyond your stop.