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Gap: meaning in forex and gold trading

A gap is a jump in price between one quote and the next with no trading in between, most often at the weekly open.

Last updated: · By Forexuro Desk · Editorial policy

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Definition

Gap: A gap is a jump in price between one quote and the next with no trading in between, most often at the weekly open.

Where gaps come from

Forex trades around the clock from Sunday evening to Friday evening, so gaps mostly appear at the Monday open, after news breaks over the weekend. They can also appear after surprise central bank actions or during very thin trading.

What gaps do to orders

A stop order inside a gap is filled at the first available price, which can be far beyond the level you set. That is why risk per trade calculations are a plan, not a guarantee. Reducing size before weekends that carry known political or geopolitical risk is a common way to manage gap risk.

Worked example

EUR/USD closes Friday at 1.1220. A weekend election surprise means it opens Monday at 1.1150. A long trade with a stop at 1.1190 is closed near 1.1150, a loss of 70 pips rather than 30.

Common mistakes

  • Holding full size over weekends with major event risk.
  • Assuming stops protect against gaps.

If you follow trade signals, for example the gold signals or EUR/USD signals, understanding this term helps you size and manage each trade yourself. The free Forexuro Telegram channel shares daily market updates where these ideas are used in practice.

Slippage

Slippage is the difference between the price you expected and the price your order was actually filled at.

Read more

Stop loss

A stop loss is an order that closes a trade at a set price to cap the loss if the market moves against you.

Read more

Volatility

Volatility is how much and how fast price moves; higher volatility means larger swings in both directions.

Read more

Liquidity

Liquidity is how easily a market can be bought or sold without moving the price; liquid markets have tight spr...

Read more

Tools and guides

Frequently asked questions

Do gaps fill?

Sometimes price returns to the pre-gap level, but there is no rule that it must.

Is gold affected by gaps?

Yes. Gold CFDs also close at weekends and can open away from the Friday close.

Education only, not financial advice. Trading forex, gold and CFDs carries a high risk of losing money, and leverage magnifies both gains and losses. Past performance is not a reliable guide to future results. Read our risk disclosure.