ICT New Week Opening Gap (NWOG)

In trading, it is important to recognize how the market reacts when it reopens after a break. One key concept that experienced traders pay close attention to is the ICT New Week Opening Gap, often called the NWOG. This gap appears between the closing price on Friday afternoon and the opening price on Sunday evening. While the market is closed, world events can unfold, and major developments can occur in politics, economics, or global affairs. By the time trading resumes, the price may open at a level different from where it closed, creating this unique gap.

Why NWOGs Matter in Trading

The NWOG forms because trading stops over the weekend, yet events and information continue to shape global markets. When price reopens higher or lower than the previous close, it leaves what traders call a liquidity void. No trades took place during the break, so there is an empty space on the chart. This gap often acts like a magnet, attracting price back to fill it and return to what many consider fair value. Understanding NWOGs can help you predict where price might move next and how the market’s supply and demand might shift after the weekend.

How to Identify the NWOG

To find an NWOG on your charts, begin by looking at the market’s closing price on Friday, usually around 4:59 PM EST. Next, note the opening price on Sunday at around 6:00 PM EST. The distance between these two prices is your NWOG. On a chart, it will look like a jump or void in price action. Once identified, these gaps become points of interest for future trades, guiding you as the market attempts to fill these empty spaces.

The Concept of Consequent Encroachment

Within the NWOG, there is a special level called the consequent encroachment, which is simply the midpoint of the gap. By using a Fibonacci tool set to 0, 0.5, and 1, you can measure the NWOG from its low to its high. The 50% mark is where the consequent encroachment lies. Price often gravitates back to this midpoint before making its next major move. As a trader, watching how price behaves around this midpoint can give you valuable clues about potential reversals, breakouts, or continued trends.

From the Weekly Chart to Lower Time Frames

Although you start by spotting NWOGs on the weekly chart, the next step is to zoom into lower time frames, like 15-minute charts, to find trading opportunities. NWOGs are not just random gaps; they can become meaningful levels of support or resistance. By marking at least four NWOGs on your chart, you create a framework to understand how price respects these reference points. Over time, you will see patterns emerge as price returns to fill these gaps, pauses at them, or uses them as platforms to launch into new trends.

Integrating NWOGs into Your Trading Bias

Your trading bias, whether bullish or bearish, will shape how you use NWOGs. If you believe prices will rise and the market is trading above an NWOG, you might wait for it to dip back into the gap and then look for signs of buying. If price is below the NWOG and you are still bullish, the gap might act as a magnet, pulling price upward until it fills the gap and possibly holds as support. In a bearish scenario, if price is below the NWOG, you could wait for it to return to the gap and look for a signal to sell. If price starts above the NWOG and you are bearish, the gap may draw price down until it breaks below, turning the gap area into resistance.

Adapting to Market Shifts

NWOGs are not just technical markers; they reflect how traders and investors react to weekend news that could reshape entire market landscapes. By understanding these gaps, identifying their midpoints, and incorporating them into your trading plan, you gain an edge in anticipating price moves at the start of each new week. Over time, as you gain experience, you will rely on NWOGs as reliable benchmarks that help you navigate the market with greater skill and confidence.

Frequently Asked Questions (FAQs)