Gap down
A gap down is when a stock opens below the low of the previous session, leaving an empty band on the chart where nothing traded. That band acts as resistance while it stays open.
In depth
Draw the gap as a rectangle, not a line. Take the low of the candle before and the high of the candle after, and the box between them is the whole gap. That box is also called a falling window. Everything inside it is resistance, and the far edge, the old low, is the strongest part.
The box stays open until a candle closes beyond it. Stock closed at 100 yesterday with a low of 99.50, opens at 97 today: the window runs 97 to 99.50. Rallies stall inside it. If a candle closes above 99.50, the window is filled and that same band flips to support. Do not shrink a window part way, and do not trade inside it.
Why it matters
A gap down is the one time your stop did nothing. It was at 99 and the stock opened at 97, so you were filled three points worse than you expected. That is overnight risk, and only position size limits it. The gap also gives you a marked zone to work with the next day.
An automatic held overnight tag marks the trades that were exposed to a gap, so you can see what carrying a position through the close has actually cost you. The calendar shows the damage by day and the stats page splits results by how long you held.
Frequently asked questions
No. Many do, but plenty stay open for months, so treat filling as a target rather than a certainty.
While the window stays open, yes. Rallies into it tend to stall until a candle closes above it.
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