Market Sentiment Shifts: Gaps often occur when there is a significant shift in market sentiment between the closing of one trading period and the opening of the next. This can be triggered by unexpected news, economic data releases, geopolitical events, or other factors that cause traders to reassess their positions.
After-Hours Trading: Price movements can continue after the official trading hours due to after-hours trading. Events or news released during this time can lead to price gaps when the market opens.
Gaps in Forex: In the forex market, gaps are less common compared to other markets like stocks because the forex market operates continuously 24 hours a day during the business week. However, over weekends or during times of low liquidity, gaps can still occur.
Liquidity Gaps: Gaps can occur in illiquid markets or during periods of low trading volume. In such conditions, there may be fewer market participants willing to buy or sell at specific prices, leading to gaps in price.
Unfilled Orders: Traders often place orders at specific price levels, anticipating that the price will reach those levels. If the market moves quickly, these orders may not be filled at the expected prices, creating gaps on the chart.
kenorb
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