What is a Weekend Gap in Forex?

Understanding Weekend Gaps

A weekend gap appears when forex markets reopen on Sunday and price jumps above or below Friday’s close. Because spot FX trading pauses over the weekend, any news released during the break—elections, geopolitical shocks, surprise economic data—gets priced in instantly at the open.

Managing Gap Risk

Gaps can trigger stop losses far from intended levels. Mitigate the risk by reducing leverage on Friday, hedging with options or correlated assets, or exiting positions ahead of known event risk. Carry positions with ample free margin in case price reopens beyond your stop.

Operational Considerations

Brokers reopen at slightly different times and may widen spreads dramatically during the first minutes of trade. Monitor multiple price feeds, avoid market orders until spreads normalize, and be cautious with automated strategies that trigger immediately at the open.

Events That Trigger Gaps

• Elections and referendums
• Geopolitical escalations or peace deals
• Unexpected OPEC or central-bank moves
• Corporate or regulatory announcements affecting specific currencies

Advanced Guidance

Build a repeatable, rules‑based process so decisions are consistent across sessions and instruments. Start from context (higher‑timeframe structure, positioning, macro tone), then define precise triggers and invalidation on execution charts. Track spread and depth so your order type matches conditions. Pre‑compute scenarios (breakout, fakeout, mean‑revert) and map actions for each to reduce hesitation.

Execution Framework

• Plan entries at levels with confluence (structure, momentum, time‑of‑day).
• Place stops beyond the logical invalidation, not arbitrary distances.
• Target at least 2–3R; scale out methodically and trail remainder.
• Avoid thin liquidity windows unless the setup explicitly requires it.
• Record slippage and spreads; poor fills can erase edge.

Review Loop

• Journal setups by session and pair to learn where they excel.
• Tag trades by catalyst (news, trend continuation, range breakout).
• Recalculate expectancy monthly; prune underperforming variants.

Risk Controls

Keep daily loss limits, reduce size after consecutive losses, and pause during regime shifts. Survival enables compounding; treat discipline and execution quality as part of your edge.