Gap

A gap is a jump on a price chart where one candle opens well away from the previous candle's close, with no trades at the prices in between. Gaps appear mostly when a market reopens after being closed.

While a market is closed, overnight or at the weekend, news keeps arriving but nobody can trade on it. When the market reopens, the first trade can happen far from the last one, and the chart shows an empty space between the two candles: the gap. Stocks and futures with fixed sessions gap often; crypto, which trades around the clock, rarely does.

A gap matters for two reasons. First, a stop order inside the gap cannot fill at its price, because no one traded there; it fills at the first price available, which can be much worse. Second, the prices around a gap often act as levels later, which is why gap levels have their own lesson. The popular idea that every gap gets “filled” is not a rule: some do, many do not.

Learn more: which markets exist, and when they are open.