Risk Statement about Price Gap

Definition of Price Gap:

For every kind of trading product, when big data (e.g. non-farm data), major event (e.g. rate hike or rate cut), important financial person speech (e.g. Fed president’s speech about monetary policy), significant transaction or other emergent influential incident takes place in the market, one big manifestation is price gap, in candlestick chart, a gap represents an unusual unfilled space or interval.

Types of Gaps:

1.In Tick chart, we could easily see a big gap between the closing price and opening price.

2.Dramatic price fluctuation takes place in one minute, which we could not clearly read from normal chart but only Tick chart. But we still can tell that price has posted a gap in the very minute.

The Causes of Gap:

1.Non-farm and other important financial data
2.The change of monetary and financial policy
3.Unexpected important financial news
4.Speeches of financial sector important figures, state leaders
5.Market’s keen demand for a specific product or currency
6.The open or close of market
Notice: gap does not only occur at non-farm data release or market open and close.

The Influences of Gap:

1.No matter what kind of order, stop loss, stop profit, market order, or limit order, all could be influenced by price gap. When gap occurs, the platform will clinch orders automatically for clients at a new price after the gap. As the price is real in the market, its unpredictable.
2.Order may be clinched at slippage price because of gap.
3.Formax will require the client to replenish the negative balance that is caused by slippage and loss account.

Formax’s Responsibilities and Rights:

1.Formax assumes no responsibility for slippage or loss account caused by price gap.
2.Formax will not compensate for any losses caused by price gap.
3.Formax has recourse if negative balance occurs after price gap caused account loss.