Price gap
A price gap is a price range in which the market did not trade between one session and the next, so the first price after the break sits away from the last price before it.
On a chart the stricter test is the whole bar: in a gap down the new bar's high sits below the previous bar's low, and a gap up is the reverse. On forex the clearest case is the weekly reopen. An order resting inside the gap cannot fill at its own level, because no price was quoted there.
This page covers the mechanic; it is not trading advice.
What a gap does to a resting stop-loss
Under the common convention the forex week runs from Sunday 22:00 UTC to Friday 22:00 UTC (21:00 UTC while US daylight saving time applies), and each broker sets the exact hours in its server schedule. A position held over the weekend goes about two days without a quote, and whatever changes the value of either currency in that time arrives in one step.
On a forex quote a Stop-loss is checked against one side of the quote, not the whole price. In MetaTrader 5, on forex and other non-exchange symbols, a long position's stop-loss is checked against the Bid, a short position's against the Ask, and a triggered stop closes the position with a market operation. A long position's stop-loss closes it at a Bid equal to or below the stop level, so after a gap down the fill comes at the first Bid the broker executes after the reopen. On a short position a gap up fills the stop-loss at the first executable Ask above it.
The common reading is that a position sized to risk 1% carries a maximum loss of 1%. That figure is the loss at the stop price, not at the fill. MetaTrader 5's help states that a stop order executes at the specified price or worse, and that a move against it fills the order with Slippage. A gap is that move with nothing quoted in between: the stop level decides when the order triggers, the first price past the gap decides what it costs.
Execution mode is set by the broker for each symbol. A Limit order fills at its price or better but may not fill at all; how a plain stop compares with a stop-limit is covered under Stop order.
The cost of a weekend gap through a stop
A long EUR/USD position of 1 standard Lot size (100,000 euros) is opened at 1.1253, also the illustrative Friday closing Bid, with a stop-loss at 1.1223. The reopening Bid of 1.1196 is an illustrative input, not a recorded gap, and the stop-loss is assumed to fill at that first Bid. Spread, commission and swap are left out.
Worked example
Loss = (entry − fill) ÷ 0.0001 × $10 per pip × lots- Entry and Friday closing Bid
- 1.1253
- Stop-loss
- 1.1223 (30 pips)
- First Bid at the reopen (illustrative)
- 1.1196
- Position
- 1 standard lot, $10 per pip
Loss at the fill
$570.00
The planned loss at the stop was 30 × $10 = $300.00. A 57-pip gap puts the fill 27 pips below the stop, adding $270.00, so the realised loss is 1.9 times the plan. Each Pip is worth $10 because 100,000 × 0.0001 = $10.
Same 1% risk, different gap loss
Gap loss scales with the lots held, not with the risk percentage. Two positions on a $10,000 account each risk $100 (1%) at their stop, with Position size worked as $100 ÷ (stop pips × $10): a 20-pip stop at 1.1233 holds 0.50 lots, a 50-pip stop at 1.1203 holds 0.20 lots. Both meet the same illustrative gap to 1.1196.
When a gap reaches the stop, realised loss divided by planned loss equals the entry-to-fill distance divided by the stop distance, since both use the same lots and pip value. With entry at Friday's close that is the gap divided by the stop: 57 ÷ 20 = 2.85 and 57 ÷ 50 = 1.14. A tighter stop permits a larger position for the same planned risk, and that larger position meets the whole gap.
Related terms
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Common questions
Does a stop-loss protect against a weekend gap?
A plain stop-loss triggers, but it does not hold its price. On a long 1-lot EUR/USD position opened at 1.1253 with a stop at 1.1223, an illustrative reopening Bid of 1.1196 fills the stop at 1.1196 if the broker executes at that first Bid. The planned loss was $300.00; the realised loss is $570.00, because a long position's stop-loss closes at the first executable Bid at or below its level. A guaranteed stop, where a broker offers one, follows its own published terms.
What happens if the gap stops short of the stop-loss?
The stop does not trigger and the position stays open. With a long 1-lot EUR/USD position opened at 1.1253 and a stop at 1.1223, an illustrative reopening Bid of 1.1229 sits 6 pips above the stop. The position shows a floating loss of 24 pips × $10 = $240.00, and the stop stays in place.
Does sizing a trade to 1% cap the loss at 1% across a gap?
No. Position size fixes the loss at the stop price, not at the fill. On a $10,000 account, a long EUR/USD position from 1.1253 with a 20-pip stop at 1.1233 holds 0.50 lots to risk $100. An illustrative gap to 1.1196 fills the stop 37 pips lower, for a loss of $285.00, or 2.85% of the account: 57 pips of gap divided by 20 pips of stop, times the planned $100.