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Glossary / Market structure

Gap

Definition

A price jump between one session close and the next open with no trading in between.

Why it matters

Gaps make overnight stops unreliable, which is why swing traders size positions against gap risk rather than the stop distance.

Example

A stock closes at $40.10 and opens at $43.20: a $3.10 gap up. Any stop placed at $39.50 overnight is filled at the open, not at your level.

How to track it in a journal

TradeStack calculates the core performance numbers — win rate, average win and loss, profit factor, expectancy, drawdown and consistency — automatically from imported trades, so gap stops being something you estimate and becomes something you read.

Related terms

Slippage
The difference between your expected fill price and the price you actually get.
Spread
The gap between the best bid and the best ask.
Liquidity
How much size a market can absorb without moving price.
Volatility
How much price moves over a given period.

Questions that use this term

Keep reading

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Position size, risk-reward, expectancy and options profit.
Expectancy calculator
Expected profit per trade from your own numbers.
Broker CSV export guides
Step-by-step exports for Tradovate, NinjaTrader, IBKR and more.
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