Volume Imbalance and Opening Gaps (NWOG, NDOG) in ICT Trading

Most candles open at or very near the previous candle's close. When they do not, a small hole appears in the chart. ICT traders mark two kinds of these holes: the volume imbalance, which is a gap between candle bodies, and the opening gap, which forms when a market closes and later reopens at a different price. The best-known opening gaps are the New Week Opening Gap (NWOG) and the New Day Opening Gap (NDOG).

The balanced price range lesson introduced these briefly. This lesson looks at them in more detail.

What it is

Volume imbalance

A volume imbalance forms between two consecutive candles when:

• their bodies do not overlap (one closes and the next opens at a different price), but
• their wicks still overlap, so price did trade through the space at some point.

In a bullish volume imbalance, candle A closes, and candle B opens higher than that close. The space between A's close and B's open is the imbalance. In a bearish one, B opens below A's close.

Gap

A gap is a stronger version: the wicks do not overlap at all. In a bullish gap, candle B's low is above candle A's high. No trade took place in that price range between the two candles.

In continuous 24-hour forex feeds, consecutive candles usually open at the prior close, so volume imbalances are uncommon there. They are more common in index futures, single stocks and around session breaks.

Opening gaps: NWOG and NDOG

• New Week Opening Gap (NWOG): the range between the last price on Friday and the first price when trading resumes on Sunday evening. For CME stock index futures, that is the 17:00 ET Friday close to the 18:00 ET Sunday open. Forex usually reopens around 17:00 ET on Sunday, depending on the broker.
• New Day Opening Gap (NDOG): in futures, the range between the 17:00 ET daily close and the 18:00 ET reopen, Monday to Thursday.

Traders mark the gap, its 50% level (consequent encroachment), and extend all three lines to the right. Several recent NWOGs are often kept on the chart at once as reference levels. The exact prices depend on your data feed, and some educators also use the first trade after the open rather than the official settlement, so two traders may draw slightly different gaps.

How to identify it

1. Volume imbalance: find two consecutive candles in the same direction where the second opens away from the first close. Confirm that the wicks overlap. Mark close to open.
2. Gap: check whether the wicks fail to overlap. If so, mark wick to wick.
3. NWOG: on an hourly or smaller chart, find the final candle on Friday and the first candle on Sunday. Mark Friday's close and Sunday's open.
4. NDOG: on futures, mark the 17:00 ET close and the 18:00 ET open each weekday.
5. Draw the CE of each zone.
6. Note location. Is the gap above or below current price, and is it inside the current dealing range? A gap above price is a possible upside target; one below is a possible downside target.

Worked example: an NWOG on the Nasdaq 100 futures (NQ)

All prices are illustrative. NQ is quoted in index points; one point is worth $20 on NQ and $2 on the micro contract (MNQ).

NQ closes on Friday at 18,604.00 at 17:00 ET. On Sunday at 18:00 ET it reopens at 18,572.00, lower after weekend news.

Gap size: 18,604.00 − 18,572.00 = 32 points. CE: (18,604.00 + 18,572.00) ÷ 2 = 18,588.00.

On Monday, price falls further to 18,530 overnight, then holds. At 09:30 ET a bullish setup appears with an entry at 18,548 and a stop at 18,528, below the overnight low. Risk is 20 points.

The trader uses the NWOG as the target zone:

• Target 1: the gap bottom, 18,572.00, which is 24 points away (1.2 times the risk).
• Target 2: the CE, 18,588.00, which is 40 points away (2 times the risk).

On MNQ, 20 points risk $40 per contract. A trader risking $100 could trade two MNQ, risking $80. On one full NQ contract, the same stop would risk $400.

If price reaches the CE and stalls, some traders also watch for a reaction there in the opposite direction, but that is a separate trade needing its own setup.

How traders use it

• As targets. Gaps above or below price are common draws, especially their near edge and CE.
• As reaction levels. When price returns to an opening gap, traders watch the edges and CE for support or resistance, similar to a fair value gap.
• As a weekly map. A stack of recent NWOGs gives a quick picture of where price has jumped in recent weeks.
• With the opening price. Gaps pair naturally with the reference levels in opening prices and the Asian range.
• Volume imbalances inside moves. A volume imbalance inside a displacement leg, like a gap inside a liquidity void, can mark a precise level within a broader zone.

Check session times with the Forex Market Hours tool, and remember that liquidity around the reopen is thin, so spreads can be wide.

Common mistakes

• Confusing the two patterns. If the wicks overlap, it is a volume imbalance, not a gap.
• Wrong session times. Using midnight instead of 17:00 and 18:00 ET produces a different NDOG.
• Treating gaps as signals. A gap tells you where to look, not what to do. You still need a setup and a stop.
• Trading the reopen. The first minutes after 18:00 ET are thin and erratic. Many traders wait.
• Ignoring feed differences. Small differences between brokers can shift the gap by a few ticks or pips.

Summary

A volume imbalance is a gap between the bodies of two consecutive candles while their wicks still overlap; a gap has no wick overlap at all. Opening gaps form when a market closes and reopens elsewhere: the NWOG spans Friday's close to Sunday's open, and the NDOG spans the 17:00 ET close to the 18:00 ET reopen in futures. Traders mark these zones and their CE as targets and reaction levels. Use them as context, place stops beyond the structure of your setup and size positions so any single loss is small.