Avoid the high risk of gapping: Understand the risk control logic behind ET gapping restrictions

In the EagleTrader proprietary trading examination, gap trading behavior has always been regarded as a high-risk area. As a trader, you may encounter various breaking news, macro events, or the market is about to close. These situations often cause the price to “gap”, that is, the price crosses the middle price in a short period of time, forming a discontinuous range on the chart. In this case, the normal order placing and stop-loss mechanisms may fail, and account risks are quickly amplified.

Understanding the risks of gapping trading is crucial to the long-term survival of every trader. This is also the original intention of ET to set rules for gapping behavior in the assessment.

For example, at the moment when the Federal Reserve’s interest rate decision, important economic data or company financial reports are released, market information is intensively released, liquidity may plummet, and spreads instantly expand. Technical analysis tools and support and resistance lines have a reduced reference value at this moment, and trading decisions are more easily affected by emotions. 2. Short positions near the market close or across time periods

Before the market is about to close If a position is established within 2 hours, or a position is held across the weekend during the market break, the market cannot adjust, and the incident is still unfolding. Once the market jumps short at the opening, the stop loss may become invalid, and the risk is difficult to control.

In these two scenarios, if traders do not control, it is easy to encounter risks such as slippage amplification, order delays, or execution failures.

How ET official rules avoid gapping risks

In order to protect traders’ risk control capabilities in real trading, EagleTrader has set clear rules for gapping behavior:

In the initial and retest phases, traders can trade freely during the news release period. This phase mainly observes trading style and risk preference.

Once an EagleTrader Account is obtained, traders are not allowed to open, close, or market execution operations within 5 minutes before or after the release of major news or economic data.

This restriction also applies to stop loss or take profit triggering. If the transaction is completed within the prohibition window, it will also be regarded as a violation.

Except for the target trading varieties, other instruments can still be traded normally. Restricted events are marked in red on the economic calendar and traders should be aware of them.

This rule is essentially a “time window restriction” on short-gapping behavior, allowing traders to take advantage of the market at its peak.Avoid position exposure at the moment of instability and weakest liquidity.

Traders’ daily operating ideas

As an EagleTrader trader, daily operations can be summarized in three points:

1. Be cautious before and after events

Before major events 5 Reduce positions or keep short positions within minutes

Avoid chasing ups and downs at the moment the news is announced

2. Pay attention to account risks

Plan stop loss and take profit to ensure that transactions will not be triggered within the restricted window

Strictly abide by the rules for position management of key varieties

3. Observe market trends To learn the rules

After a gap, the market may have a covering gap, relay or breakthrough mode

Have an intuitive understanding of the characteristics of the market gap, which will help form stable trading habits

Through these operations, traders can not only comply with EagleTrader rules and complete the exam, but also cultivate awe and management capabilities for gap risks in the real market.

Gaps are part of the nature of the market – they reflect discontinuities in the spread of information, discontinuities in trading hours and collective mutations in the behavior of market participants. The gap restriction rules for self-operated trading actually force traders to develop a sense of respect for market “discontinuity”.

Real trading wisdom lies not in how to profit from short jumps, but in how to identify and avoid these high-risk areas. As a senior trader interviewed previously said: “There are many opportunities in the market, but your capital is limited. Skipping the most dangerous opportunities is often the first step towards stable profits.”

For traders who are eager to pass the proprietary trading assessment, understanding and complying with gap limits is not only a requirement for passing the exam, but also an important training for cultivating professional trading habits and establishing long-term viability.