What is Gap in Forex Trading?

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Gap is the price difference between new and previous candlestick. If the opening price of the candlestick is not the same as the closing price of the previous one, so there is a space between the two candles. Compare to the share market; gaps are not frequent in forex trade. Gap in forex usually happens when the market closes on Saturday and opens on Monday.

There is a cause of why Gaps happen in forex trade. The central concept is that because there is no support or resistance in the gap, so the price has room and freedom to move anywhere inside the gap. Another primary reason is that, during the weekend interbank currency market, political events, economic figures, company announcements and natural disasters continue to react to the market. Consequently, when you open a trading chart on Monday, you see a gap.

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