Understanding Forex Shortfall and Forex Gap

2023-06-05

Summary:

Discover correlations between forex short selling and market gaps, revealing significant differences in prices between consecutive trading days.

Gap refers to a fault formed by two consecutive candlesticks (or bar curves) representing the changes in the exchange rate of a currency.

Usually, according to the time cycle adopted by forex traders, when one candlestick chart ends, the next candlestick chart is about to begin forming; At this point, there will be an overlap between the closing price of the completed candlestick chart and the opening price of the new candlestick chart.

However, if there is a gap formed between the closing price of the closed candlestick chart and the opening price of the new candlestick chart, there will be a significant gap, and the new candlestick chart may appear above or below the closed candlestick chart.

What is foreign exchange short selling? Is Foreign Exchange Shortfall a Foreign Exchange Gap?

Is there a Distinction between a Forex Shortfall and a Forex Gap?

Forex short selling and forex gap are a concept that usually refers to a significant gap or discontinuity in forex prices between two adjacent trading days.

Forex short selling refers to a significant gap in forex prices between the previous day's closing price and the next day's opening price, i.e. skipping a certain price range. For example, if the euro/dollar exchange rate is 1.1100 at the close of Friday and 1.1150 at the opening of Monday, it can be said that there has been a forex short.

Forex gap refers to the same phenomenon, where forex prices show significant gaps or interruptions between two adjacent trading days, i.e. skipping a certain price range.

Therefore, the concepts of forex short selling and forex gap are the same, both indicating a significant gap or discontinuity in prices between two adjacent trading days.

【 EBC Platform Risk Reminder and Disclaimer 】: There are risks in the market, and investment needs to be cautious. This article does not constitute investment advice.

Previous： Profit from Short Selling in Forex Trading

Next： What Factors Influence Crude Oil Futures Prices?

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