# Opening Gap A Smart Money Concepts / ICT concept (Imbalance taxonomy) in the LuxAlgo Library, with 1 indicator implementation. ## What is an Opening Gap? An opening gap is the span between one session's close and the next session's open, untraded not because price moved too fast, but because the market was shut. That makes it a calendar-made imbalance, unlike a [fair value gap](https://www.luxalgo.com/library/concept/fair-value-gap/), which needs a fast three-candle sequence to form. ICT's taxonomy names the recurring ones: the new day opening gap (NDOG) between a futures session's close and its reopen, the new week opening gap (NWOG) between Friday's close and the weekly reopen, and the opening range gap between the prior regular-session close and the next 9:30 AM ET open on U.S. index products. Gap analysis long predates the SMC vocabulary: Edwards and Magee's Technical Analysis of Stock Trends (1948) sorted gaps into common, breakaway, runaway, and exhaustion types and debated which fill. Michael J. Huddleston's ICT teaching recast the idea in imbalance terms: a gap is a range where no trade occurred, a candidate destination for future price like any other imbalance. For the opening range gap specifically the anchor is regular-session prices: index futures trade nearly around the clock, so that gap is an imbalance in regular-hours terms, not a literal untraded hole. The SMC/ICT reading treats each gap as unfinished business: a range holding no agreed prices, which the market often revisits: fully, partway to the midpoint (consequent encroachment, in ICT vocabulary), or not at all. Recent gaps, weekly ones especially, stay marked on the chart and are watched as reference levels long after the open that created them. Because the levels are known before the bell, gaps slot into session planning alongside other pre-marked references: edges and midpoint are watched with [session liquidity](https://www.luxalgo.com/library/concept/session-liquidity/) such as the overnight high and low, and reactions are timed against the morning [killzones](https://www.luxalgo.com/library/concept/killzones/). A gap edge can also act as [inducement](https://www.luxalgo.com/library/concept/inducement/), since a poke through it that instantly fails is a familiar trap before the real move. ## How to mark opening gaps on a chart The levels are objective; the work is picking the right closes for your product and keeping the boxes current. 1. Define the reference closes: the daily close at the CME maintenance break for a new day gap, Friday's close for a new week gap, and the prior regular-session close (4:00 or 4:15 PM ET by convention) for the opening range gap on index futures. 2. At each open, draw a box from the reference close to the opening print and add the midpoint line, the level ICT calls consequent encroachment. 3. Keep recent weekly gaps on the chart, commonly the last five, since old unfilled gaps keep drawing reactions weeks later. 4. At the open, watch the first reaction: fill attempt, rejection at an edge, or hesitation at the midpoint, and let that pick the scenario you trade. ## How traders use it - As pre-marked session levels: the gap's high, low, and midpoint are mapped before the open, and the first reactions at those levels (rejection at an edge, hesitation at the midpoint) frame early trades. - As fill scenarios rather than predictions: some gaps fill immediately, some reach the midpoint and continue, some stay open for weeks. The useful posture is a branch plan for each outcome, not an assumption that the fill is owed. - As longer-term reference zones, several recent weekly gaps are commonly kept on the chart, and price returning into an old one is watched for support or resistance behavior: a tendency to plan around, not a rule. - As a morning bias filter: whether the first half hour holds price beyond the gap or rejects it back inside is an early tell; some traders map the session onto the [accumulation-manipulation-distribution](https://www.luxalgo.com/library/concept/accumulation-manipulation-distribution/) template with the gap-fill leg as the manipulation. - As confluence with other imbalances: a gap edge overlapping an [order block](https://www.luxalgo.com/library/concept/bullish-bearish-order-block/) or old session extreme is an upgraded level, and traders who formalize imbalance treatment apply their [FVG behavior](https://www.luxalgo.com/library/concept/fvg-behavior-rules/) playbook to gap boxes. ## Opening gap vs related concepts - **Fair Value Gap** (https://www.luxalgo.com/library/concept/fair-value-gap/): A fair value gap forms from speed during continuous trade and can appear anywhere; an opening gap forms from the calendar at fixed times. Both are imbalances price may revisit, but opening gaps are known in advance and shared by everyone watching the same clock. - **Liquidity Pool** (https://www.luxalgo.com/library/concept/liquidity-pool/): A liquidity pool is resting orders beyond an obvious level; an opening gap is a shelf of prices where nothing traded. Both act as draws in ICT narratives and often chain: a sweep through the pool powers the run into the gap. - **Session Liquidity** (https://www.luxalgo.com/library/concept/session-liquidity/): Session liquidity is the highs and lows sessions leave behind, where stops rest; opening gaps are the spaces between sessions. Both belong on a pre-market map, but one implies orders waiting to trigger, the other prices waiting to be auctioned. ## FAQ ### Do opening gaps always get filled? No. Many do fill, often quickly in liquid products, but some fill only partway (commonly to the midpoint) and some stay open indefinitely. There is no fill rate that holds across instruments and regimes, so treat the fill as one scenario among several and let the first reaction at the gap's edge or midpoint tell you which branch is playing out. ### What is the difference between an opening gap and a fair value gap? Formation. A fair value gap forms during continuous trading, when a fast middle candle leaves the first and third candles' ranges unconnected. An opening gap needs no pattern at all: it is the space between a close and the next open, created while the market was shut. Both are read as imbalances price may revisit, but they are marked and tracked separately. ### What are NDOG and NWOG in ICT trading? New day opening gap and new week opening gap. The NDOG spans a CME session's daily close and reopen across the maintenance break (5:00 to 6:00 PM ET on equity index futures); the NWOG spans Friday's close and the Sunday reopen. ICT treats both as standing reference imbalances, keeping several recent NWOGs marked. ### What is consequent encroachment on an opening gap? ICT's term for the gap's midpoint, the 50% level of the box. Partial fills are common: price often trades to the midpoint, reacts, and leaves the rest of the gap open, so the midpoint is marked alongside the edges; the reaction there is a tendency, not a promise. ### Why does Bitcoin have CME gaps if crypto trades around the clock? Spot crypto never closes, but CME Bitcoin futures pause daily and close for the weekend, so gaps appear on the CME chart alone. The popular CME-gap watch is the same opening-gap logic applied to that venue; fills are common but not owed, as with index products. ## Implementations in the Library - Imbalance Detector (LuxAlgo): https://www.luxalgo.com/library/indicator/imbalance-detector/ ## Related concepts - Fair Value Gap: https://www.luxalgo.com/library/concept/fair-value-gap/ - FVG Behavior Rules: https://www.luxalgo.com/library/concept/fvg-behavior-rules/ - Inversion FVG: https://www.luxalgo.com/library/concept/inversion-fvg/ - Immediate Rebalance: https://www.luxalgo.com/library/concept/immediate-rebalance/ - Balanced Price Range: https://www.luxalgo.com/library/concept/balanced-price-range/ - Implied FVG: https://www.luxalgo.com/library/concept/implied-fvg/ - Volume Imbalance: https://www.luxalgo.com/library/concept/volume-imbalance/ - New Day Opening Gap: https://www.luxalgo.com/library/concept/new-day-opening-gap/ - New Week Opening Gap: https://www.luxalgo.com/library/concept/new-week-opening-gap/ - Consequent Encroachment: https://www.luxalgo.com/library/concept/consequent-encroachment/ --- Source: https://www.luxalgo.com/library/concept/opening-gap/ (LuxAlgo Library, the encyclopedia of trading & technical analysis). Free to use with attribution: https://www.luxalgo.com/library/license/