Gap Up / Down

### It is an absence, not a move A gap is not price moving fast. It is price not trading at all. The chart jumps because there was no market at those levels: no buyers, no sellers, no candles, nothing filled in between. That blank space is the record of a stretch of prices that never existed. The distinction sounds academic right up until it decides how much money you lose. ### Why your stop loss stops being a limit A stop loss is an instruction to get you out at the next available price once your level trades. It is not a promise of *that* price. In an orderly market the two are the same thing, so nobody notices the difference. In a gap they come apart. Module 8, Lesson 1 puts it plainly: if price gaps straight through your level, there is no buyer or seller sitting at it to fill you, so you get filled at the next available price. A planned 20 pip stop can turn into a 60 pip loss simply because there was no liquidity at 20. Sit with what that does to everything downstream. Position sizing (Module 6, Lesson 3) works backwards from 1 percent risk and your stop distance. Every number in that calculation quietly assumes the stop fills where you put it. A gap is the common event that breaks the assumption, and it only ever breaks it in the direction that hurts. This is also why "I'll just watch it closely instead of setting a stop" is not a plan (Module 6, Lesson 5). Watching closely does not help you when there was nothing to click through. ### Where they come from - **The weekend.** Forex closes at the New York close on Friday and reopens at the Sydney open (Module 1, Lesson 3), which lands on Sunday evening or Monday morning depending on your clock. Anything that happens in that dead window gets priced the instant the market reopens, with no candles in between to walk price there. - **News.** A high-impact release hollows out the order book and can send price through levels with nothing resting at them (Module 8, Lesson 1). - **Thin markets.** Bank holidays produce liquidity gaps that let a stop skip straight through its level, exactly like during news (Module 8, Lesson 5). Exotic pairs are worse still: Module 1, Lesson 4 warns you can hold one into Friday's close and find it gapped straight through your stop by Monday, which is part of why beginners are told to leave exotics alone entirely. ### What this system does about them Nothing clever. It stays out of the way. The two gap-producing conditions the system can actually time, it avoids. Nothing new is opened in the 1.5 hours before a red folder release, nothing is traded during it, and an open position is closed 30 minutes before the number lands (Module 8, Lesson 3). Bank holidays are off the table completely (Module 8, Lesson 5). None of that is a prediction that a gap is coming. It is about the tail. One gap through your stop can cost more than the small continuations you gave up by closing early ever added up to, which is the same lopsided maths the news rules are built on. The weekend gap is the one you cannot sidestep by timing, because it forms while the market is shut. The stop is still mandatory, because it caps every other way a trade goes wrong, but understand that a gap is precisely the case it cannot cap. On a funded account the decision is taken out of your hands: most firms prohibit weekend holding outright, because a gap on the Monday open can blow through a drawdown limit in one move (Module 13, Lesson 8), and Module 13, Lesson 4 lists holding over the weekend among the predictable ways funded accounts die. Gaps do tend to get filled in the sessions that follow, which is why some strategies fade them. Be clear that fading them is not a TradeInTune model. Every entry this system has needs real structure, a rejection candle on an approved timeframe (Module 9, Lesson 14), and either a sweep or divergence to confirm it (Module 9, Lesson 10). A gap offers none of the three. A gap is a risk this system manages, not an opportunity it trades.