How a Gap is Formed http://www.financial-spread-betting.com/course/gaps.html PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE How intraday gaps are created.
Gaps analysis specifically during a day. Let’s look first at an overnight gap example. When a market closes (like what happens with stocks) you might get the next price at a gap lower and the reason for that is that you can’t trade when the market was closed. What about intraday gaps? These are admittedly less frequent but they do happen. People are putting in Bids and Ask prices and people are actually queuing on each side with limit orders going direct to the exchange. If someone comes along with a big market order they could take a lot of bids and that’s where gaps are formed. In the most liquid instruments this is more rare but it still happens occasionally. With currencies this is a little different because we have banks trading against each other but the concept is the same.