Gapping
When the price of a security jumps to a new price not directly adjacent to the previous one, creating a gap between ticks on a price chart. Gapping often occurs when liquidity is low and the price is heavily affected by lighter trading.
Related terms
Slippage
The difference between the expected price of a trade and the price at which it is executed. It can occur during periods of higher volatility.
Read full definitionGuaranteed Stop
A stop-loss order that ensures a position is closed at the exact price specified, regardless of market volatility, slippage or gapping. Guaranteed stops are often free to attach, but brokers charge a premium if the order is triggered, reflecting the risk they take on.
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Bar Chart
A chart type built from four significant points: the high and low prices, which form the vertical bar; the opening price, marked with a horizontal line to the left of the bar; and the closing price, marked with a horizontal line to the right.
Read full definitionBasing
A chart pattern showing when demand and supply of a product are almost equal, resulting in a narrow trading range and the merging of support and resistance levels.
Read full definitionBollinger Bands
A technical analysis tool consisting of a band plotted two standard deviations either side of a simple moving average, used to find support and resistance levels.
Read full definitionCandlestick Chart
A chart type used to analyse a market’s price. Unlike bar charts, candlestick charts show the market’s high, low, open and closing price within each period.
Read full definitionChartist
A trader who analyses a market’s price history to determine future price trends, using a range of analytical tools and indicators to conduct technical analysis on a price chart.
Read full definitionConsolidation
A period of range-bound activity after an extended price move, in which a market neither continues nor counters the longer-term trend.
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