A price gap is a difference in the price of two items. These items can be similar such as a pair of jeans and a shirt or they can be vastly different such as food and gas. To determine where the pricing discrepancy lies, it is important to look at the cost of manufacturing and transportation for each item. Items that are manufactured domestically will usually have a smaller price gap than those imported from overseas because it doesn't require expensive import and export taxes.

In a chart, a price gap is an area where there is no trading or price movement. Gaps are extremely common in Forex, but they happen rarely. Usually, gaps happen on weekends. Every trader should be aware of gaps.

A price gap occurs when the price of a financial asset opens significantly above or below its previous closing price, creating a visible break on the chart where no trading activity took place. It is commonly seen in markets such as stocks, forex, and commodities, often triggered by major news, earnings announcements, or sudden shifts in investor sentiment. There are different types of gaps, including gap-up and gap-down movements. Traders study these gaps to interpret market strength, momentum, and possible future price direction. Some gaps tend to close quickly as prices retrace to fill the empty space, while others, like breakout or exhaustion gaps, may indicate strong trend continuation or reversal. Understanding price gaps helps traders make informed decisions about timing, entry, exit, and risk management in volatile market conditions in trading markets.