Don’t waste your time – keep track of how NFP affects the US dollar!

Data Collection Notice

We maintain a record of your data to run this website. By clicking the button, you agree to our Privacy Policy.

facebook logo with graphic

Join Us on Facebook

Stay on top of company updates, trading news, and so much more!

Thanks, I already follow your page!
forex book graphic

Beginner Forex Book

Your ultimate guide through the world of trading.

Get Forex Book

Check Your Inbox!

In our email, you will find the Forex 101 book. Just tap the button to get it!

FBS Mobile Personal Area

market's logo FREE - On the App Store

Get

Risk warning: ᏟᖴᎠs are complex instruments and come with a high risk of losing money rapidly due to leverage.

76.5% of retail investor accounts lose money when trading ᏟᖴᎠs with this provider.

You should consider whether you understand how ᏟᖴᎠs work and whether you can afford to take the high risk of losing your money.

How to trade gaps

Information is not investment advice

A gap is an empty space within a price chart between the two neighboring candlesticks.

Gaps occur when the following candlestick opens at a distance from the previous candlestick closing price. This may happen if the market’s view of the price rapidly changes and there’s a sudden influx of buy/sell orders. At some point, the price which was at the closing of a candlestick is no more interesting for traders and the new price of the following candlestick better represents the value of an asset (a currency pair).

In Japanese technical analysis gaps are referred to as “windows”.

Here are the main types of gaps:

1. Breakaway gaps

Breakaway gaps occur at the end of a price pattern and signal the beginning of a new trend. Such gaps appear when the price is testing a level on the chart – support, resistance, trend line, trend channel etc. The price suddenly gaps through the tested level and then starts a new trend in the direction of the breakout. It’s easy to spot breakaway gaps on the chart. Their other advantage is that by spotting ing such gap a trader can join a new trend at the earliest stage.

Breakaway gap chart

2. Continuation gaps

Continuation gaps happen in the middle of a price pattern and signal a rush of buyers or sellers who think that the price will continue going in the same direction. In other words, if you see a bullish gap during an uptrend, then you have a bullish continuation gap in the price chart. If a trend is bearish and a bearish gap is formed, it’s bearish continuation gap.

Continuation gap

3. Exhaustion gaps

Exhaustion gaps take place near the end of a price pattern and signal a final attempt to hit new highs or lows. During these time, the last portion of market players joins the trend and there will be no one to support this trend after that. As a result, an exhaustion gap is followed by a reversal in price action. It’s possible to take an exhaustion gap for a continuation one. To make the right distinction between these two types of gaps, have a look at the size of candlesticks: if a currency pair is very volatile, candlesticks on the chart are big and the price made several jerking moves, it might be an exhaustion gap.

Exhaustion gaps

Besides the types of gaps mentioned above, it’s also possible to see common gaps. By this term, we mean gaps that can’t be placed in a price pattern and simply represent an area where the price has gapped.

Weekend gaps

A specific type of gaps takes place after weekends. As you know, the Forex market is not very active on Saturday and Sunday, so the main currency trading ends on Friday and starts on Sunday night with the beginning of the Asia-Pacific trading session. Yet, important events may happen during the time the market is standing still. The news may include a great number of things from political announcements and interviews to natural disasters. As a result, a great number of trading orders is accumulated before the opening of the market. These orders are not met with counter orders. As there’s no demand/supply, market players have to open positions for the prices that are higher/lower than the prices seen on Friday evening. You can easily spot weekly gaps on M1-H4 timeframes. Sometimes, when there really are some big news during the weekend, an opening gap can be very wide.

Tips and tricks for trading gaps

Popular

Assets Won’t Survive This Week

As Europe moves into recession, next week may provide us with some amazing trading opportunities. Here they are!

Post-Fed Releases for USD & CAD Traders

Main news that will drive the market in the upcoming week include CB Consumer Confidence Index, Canadian GDP, and US Core PCE Price Index

FED and BOE Make Another Attempt to Beat Inflation

The Federal Reserve (Fed) will announce its Interest Rate Decision and make a statement about the future monetary policy on Wednesday, September 21, GMT+3. After the higher-than-expected inflation numbers published on September 13, there’s almost no doubt the Federal Reserve will come up with another 75-basis-point rate hike. However, surprised by the CPI numbers, several Fed members announced the possibility of a 100-basis-point rate hike on Wednesday.

Choose your payment system

Feel the Team Spirit

Callback

Please fill in the form below so we can contact you

Select the best time for us to call you. We give calls from Monday to Friday in suggested intervals. In case we couldn't get through, we will try again at the same time the next day. For getting real-time assistance, use FBS chat.

We provide only English-speaking callbacks. If you prefer any other languages, contact the support team.

We will call you at the time interval that you chose

Change number

Your request is accepted.

We will call you at the time interval that you chose

Next callback request for this phone number will be available in 00:30:00

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later