How can we handle forex gaps?

In my opinion, the honest truth is no one can predict with 100% accuracy what happens next in forex. There is no crystal ball. The best we can do is to mitigate the risk of forex gaps.

Forex gaps can result in margin calls, especially if one is over sized on one's position. Therefore you should always practice proper money management at all times. I had three margin calls before and one of which resulted from a gap. The gap was so big that it wiped my entire account and went into negative. ( There was no way for the broker to close my positions over the weekend )

• If you are a short term trader ( days at most ) consider carefully before leaving trades over the weekend. Definitely keep a lookout for economic events scheduled for the weekend. Make sure you practice proper money management. Many investors take profits on Fridays. This is not without a valid reason. They probably do not want to face the risk of holding the positions over the weekend. Personally i wouldn't want to as well
• If you are a long term trader and is trading the right way, you probably have planned your trades well and have wide enough stop loss allowance to sustain most but the worst of gaps. Practice proper money management and this may save you from catastrophic events

A last note before i end this article. You may have heard people speculating on whether will the forex gap close.

When a forex gap closes, it simply means that the price goes back to the level it was before the gap. One possible reason for a closure will be that the gap may have happened because of a knee jerk reaction to an event. Once the commotion surrounding the event disappears, the market may realize that " Hey, that event wasn't so great after all " and normal economic forces take over and bring the price to where it was before the event. Do note however that there is no 100% rule that forex gaps will close. I will like to remind you again that nothing in forex is 100% confirmed.