A price gap is a difference in the price of two items. These items can be similar such as a pair of jeans and a shirt or they can be vastly different such as food and gas. To determine where the pricing discrepancy lies, it is important to look at the cost of manufacturing and transportation for each item. Items that are manufactured domestically will usually have a smaller price gap than those imported from overseas because it doesn't require expensive import and export taxes.

In a chart, a price gap is an area where there is no trading or price movement. Gaps are extremely common in Forex, but they happen rarely. Usually, gaps happen on weekends. Every trader should be aware of gaps.