What price is

The price of an asset at any moment is the level of its most recent matched trade — where the most willing buyer and the most willing seller just met. It is not the asset's "value," nor a number set by anyone: it is the trail of a negotiation that never stops.

How price forms

Every market revolves around two queues: buyers line up waiting bids from high to low, sellers line up waiting asks from low to high. The best waiting bid is the bid, the best waiting ask is the ask, and the distance between them is the spread. When an order accepts crossing that distance — buying straight into the ask or selling straight into the bid — a trade matches, and that level becomes the latest price. Price drifts up when buyers keep crossing, down when sellers do: price movement is the record of which side is accepting the other side's terms more.

How matching works

  • Continuous matching: for most of the session, incoming orders match immediately by price-time priority — better price first, and at the same price, earlier arrival first.
  • Periodic matching (auctions): at the open and close, many exchanges collect orders over a window and match them once at the level that clears the most volume — that is how official opening and closing prices form.
  • OTC markets: forex and CFDs have no shared order book — prices come from liquidity providers' quotes, so at the same moment, prices can differ slightly between brokers.

What a price gap is

A gap is empty space between one candle's close and the next candle's open — a price range where no trade occurred. Gaps appear when information or orders arrive while the market isn't matching continuously: news outside trading hours, weekends in markets that close, or liquidity too thin to absorb. Analysts often name a few gap types by where they appear — common, breakaway, runaway, exhaustion — as context labels, not prediction formulas. The saying "all gaps get filled" is a conditional statistical observation, not a law: some gaps fill within hours, some stand for years.

A few companions

  • Slippage: the actual fill deviating from the expected level, typically in fast or thin markets — a market order walking through several levels of the book.
  • Reference price and daily limits: some markets (like Vietnamese equities) cap each session's range around a reference price — at the limit, matching continues only on one side.
  • Market depth: the resting orders at levels around the current price — how large an order the market can absorb before price moves.

FAQ

  • Why am I down the moment I buy? Because a buy fills at the ask while the display usually shows the bid or last trade — the spread is "paid" at entry, before price moves at all.
  • What's special about the closing price? Many markets form it through the day's final auction and use it as the official reference for calculations — which is why many analysis methods weigh it above intraday levels.
  • Do gaps always get filled? No. Many fill because price tends to revisit heavily traded zones, but nothing guarantees it — trading purely on "the gap will fill" is a bet on a probability, not a law.
  • Why does every venue show a slightly different price? Centrally matched assets have one book per exchange; OTC instruments have one quote stream per broker. Small differences are normal and are usually narrowed by arbitrage.