notch

A gap is a discontinuous area that forms when the price of an asset rises or falls sharply on a technical chart, with little or no trading in between. Thus, a bar or candlestick chart shows a "gap" in the normal price pattern.

Due to underlying fundamental or technical factors, gaps in forex trading often occur unexpectedly when the perceived exchange rate between two currencies changes.

Gaps do occur in the forex market, but they are significantly less frequent compared to other markets because currencies are traded 24 hours a day, 5 days a week. However, when economic data is released that surprises the market, or when trading resumes after a weekend or holiday, there may be gaps, creating gaps.

Despite the ban on speculative trading in the forex market over the weekend, the market remains open to central banks and related organizations. This makes it possible for the opening price on Monday morning to be different from the closing price on Friday, resulting in a price gap. Monday's opening price is different from Friday's closing price. This difference is the gap. If Monday's opening price is higher than Friday's closing price, the price "gaps up". If Monday's opening price is lower than Friday's closing price, the price "gaps down".

The type of notch

Gaps can be divided into four types:

Common gaps only represent areas where there is a gap in the price.
A breakout gap appears at the end of the price pattern and marks the beginning of a new trend.
Persistent gaps, also known as runaway gaps, appear in the middle of a price pattern, indicating a flock of buyers or sellers who share a common belief in the future direction of the price.
The depletion gap occurs near the end of the price pattern, marking the last attempt to hit a new high or low.