Is the Monday gap always filled?

[Shadow Trader]

A gap fill is one of those statements that sounds like a law. Price opens Monday away from Friday's close, and apparently it comes back. In FX, though, gaps are small and brokers define them differently, so the claim is hard to test.

The gap depends on which feed is used. One broker's Friday close at 21:59 and Sunday open at 22:01 can differ from another's by half a pip, which changes whether there's a gap at all.

When a gap does exist, it's usually the result of weekend news. A real shift in information, like an election or a policy announcement, can make a gap permanent. A gap with no news behind it, caused simply by thin Sunday quoting, tends to fill more often because it was never a real repricing.

That's the useful distinction. Gaps without a cause tend to close. Gaps with a cause tend to stay, and may even extend.

Counting is better than believing. Ten Monday opens on a single pair, with notes on what the news weekend looked like, will say more than any statement in a book.

What did the count show when the Monday gaps were recorded on your pair?

[Amanhasnoname]

I actually did this count on EURUSD over about half a year, using my broker's feed and noting the weekend news for each Monday. Of the gaps that were big enough to bother with, more than a pip or so, a clear majority filled within the first few hours of the Asian session. The ones that didn't were almost all weekends with something real behind them, like an election result or a surprise statement from a policymaker.

Your point about the feed making a difference is something I ran into as well. When I compared my numbers with a friend using another broker, several of my small gaps simply didn't exist on his chart, and a couple of his were bigger than mine.

So I don't treat it as a law, but I do trade it in a limited way. If there's no clear news and the gap is modest, I'll take a small fade once the spread has calmed down, with a stop beyond the Sunday extreme. If the weekend had a real story, I leave it alone completely.