Order Blocks That Leave a Gap Behind: One Condition for Choosing Which Zones to Watch

Everyone who has opened a chart on a Monday morning knows the weekend gap: the market closed on Friday at one price, opened on Monday at another, and between the two is a blank space where nobody traded. A fair value gap is almost the same thing in the middle of the week, inside three ordinary candles, with one difference: price did cross that strip, once, inside one fast candle, and the candles on either side never reached it. Look for it next to your order blocks, and you have a simple way to decide which zones deserve your attention.

The gap inside three candles

Take any three candles in a row and compare the high of the first with the low of the third. On a slow chart the two candles overlap. When the middle candle is fast enough they do not, and the strip of prices between them was crossed only once, inside that one candle and in one direction; the candles on either side never traded there. That strip is the fair value gap. For an upward move it runs from the high of the first candle to the low of the third; for a downward move, from the low of the first to the high of the third.

Here is the one comparison I will use. Walking up a staircase calmly, you touch every step; running up in a hurry, you skip some. A fair value gap is a skipped step: price was in such a hurry that it never stopped at those prices. That is all the gap says. It does not say who was in a hurry or why, or promise that price will come back to the skipped step.

The zone, and the move that leaves it

An order block, in the mechanical sense I use, is the last candle of the opposite colour before a strong move: the last red candle before price pushed up through its high, or the last green candle before price broke down through its low. The zone is that whole candle, wick to wick. The move counts as strong when the break comes within a few candles and the breaking candle closes at least one average true range away from the far side of the zone.

Many candles satisfy that rule, so which zones deserve attention? Today's reading uses one condition only: look at the move that left the zone and ask whether it skipped a step. If it was fast enough to leave a fair value gap right next to the zone, count the zone as worth watching. If price walked away calmly, touching every step, the zone is a weaker candidate. It is still a zone; it just does not go in the front row.

What the typical shape looks like

Picture a demand zone where the strong move is the very next candle. Candle one is the red zone candle, candle two the big green candle that closes above its high, and candle three stays above the high of candle one, its low included. Those three candles hold a bullish gap whose bottom edge is the high of candle one, which is also the top edge of the zone, so the gap sits directly on the zone, touching it. For a supply zone it hangs under the lower edge. When the big candle comes second or third after the zone candle and still leaves a gap, that gap is no longer glued to the edge; it can sit a little away from the zone or overlap it. Both shapes count.

Figure: the Pro screen from an older build of Order Block Zones, on an H1 chart. The upper red band is a supply zone from H4; the red dashed line is its lower edge, and the dark box directly under that line is the gap left by the drop out of the zone (it starts a hair below the line because the zone is H4 and the gap is H1). The two purple strips inside the red band are two more H1 gaps left while price stepped down through the H4 zone. The dotted frames marked NY and LDN are session boxes and have nothing to do with gaps. Lower down is an H1 supply zone with a gap band inside it (purple in that build). Higher-timeframe zones are a Pro feature. This build drew gaps as filled boxes; current versions draw them as thin outline boxes in front of the candles, higher-timeframe gaps as dashed outlines, and the purple overlap colour no longer appears.

Narrowing your own chart

In the figure, the upper zone passes: price left it so fast that the strip of prices right under it was crossed in one candle and not traded again. The lower zone shows the overlapping shape. Now do it on your chart: count the zones, look at the three candles where price left each one, and mark the zones that left a gap. You will end up with a shorter list. One thing must be said plainly. Order Block Zones does not filter zones by gaps. It finds zones with the rule above, which has no gap condition, and draws fair value gaps as a separate thing on the same chart. The matching is yours to do by eye: is there a gap box next to this zone, yes or no?

Why the gap box is often already gone

One piece of geometry matters. When the strong move is the very next candle, the gap sits exactly on the zone's edge. Price coming back to a demand zone comes from above, so it walks down through the gap before it reaches the zone. A gap counts as filled when price reaches its far edge, and that far edge is the top of the zone. So the moment price touches the zone is the moment the gap is filled, and the box is removed right then. A touched zone therefore usually shows no gap box, although one was there when it formed.

So "left a gap" is evidence from the moment the zone was created, not something you read later. Check it while the zone is fresh, or read the three candles directly; candles never disappear. A tool that keeps only a limited number of open gaps may also no longer draw the gap of an older zone, even if it was never filled. When in doubt, look at the candles.

What this condition does not do

Three things. First, a touch of a zone is not a signal, with or without a gap. The zone is a place to watch the reaction: does price leave quickly with a strong candle, or sit inside and slowly work through? The reaction is the information; the touch only tells you when to look. Second, the gap condition is a reading choice, a way of ordering your attention, not a proven edge. I give you no number for how often these zones hold, because I have none I would stand behind. Third, zones with a gap fail. Price can run straight through a zone with the cleanest gap on the chart, often enough that your stop, not the gap, is what protects you.

Where the tool fits

If you want both things drawn for you, zones and gaps, the free edition of Order Block Zones draws the zones of the chart timeframe, up to five, and since version 1.49 draws the newest six open fair value gaps of the chart timeframe as thin outline boxes in front of the candles. Order Block Zones Pro keeps eight zones by default, lets you raise the number of gaps to twenty-four, and adds H4 and daily zones on top of a lower-timeframe chart, with their gaps as dashed outlines. Neither edition uses gaps to decide what is a zone or tells you which zones pass today's condition. Fresh, touched and broken zones were the subject of an earlier post.

Homework for tomorrow

Open the chart you trade from. Count the zones. For each zone, look at the candles where price left it and note the time, the side, and "gap" or "no gap". Then, for one week, every time price comes back into one of those zones, add a line: gap or no gap, and what price did in the first few candles after the touch. Do not score it and do not trade it. After a week, read the notes back; you will know from your own chart whether this condition changes anything.