A price gap occurs when there is no trading activity for a certain period, resulting in a noticeable gap between the closing price of one candlestick and the opening price of the next. This is most evident on candlestick charts.
Price gaps often happen during major news events or at the opening of markets. They occur when the first price quote of a new trading period significantly differs from the last quote of the previous period.
These gaps are part of general market risk, which clients accept when registering an account, as they are beyond the broker's control.
Impact on Trading:
Gaps can have both positive and negative effects on your trades, depending on the direction of your positions relative to the market movement.
Keep in mind: while CFD trading provides the potential to profit from both rising and falling markets, it also involves a high level of risk due to leverage. To manage risk effectively, create your trader profile, develop a strategy tailored to your goals, and define the level of risk you’re willing to take. Read our article here to learn more about managing risks in CFD trading.
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