A market gap occurs when the opening price of a new trading day is significantly higher or lower than the closing price of the previous day, creating a visible gap on the chart with no intermediate trading prices.

Key Points:

• Market gaps usually happen during periods of high volatility, major news releases, or low market liquidity.
• Traders can observe gaps directly on charts as a jump in price from one period to the next.

Market gaps can present trading opportunities but also carry higher risk due to sudden price movements.