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Trading glossary · risk

gap risk

The danger that price jumps right past your safety exit while the market is closed.

The fuller meaning

The risk that price opens beyond a stop level, so the stop fills at the next available price and the loss exceeds plan. It is highest around results, central bank decisions and weekends; traders allow for it by trading smaller and avoiding thin markets.

gap risk.

Related words

1% rule · ATR stop · average loss · average win · breakeven · breakeven win rate · correlation · daily loss limit · drawdown · equity curve