Tasuki Gap Patterns Guideline

Tasuki Gap Pattern is often referred to as “the Tasuki Gap Candlesticks”. It is a type of technical analysis figure that is used among traders to “predict” the future of the current trend. However, the Taski Gap Pattern has an accuracy of almost 60% based on recent studies. Furthermore, the Tasuki Gap Pattern appears frequently during strong trends and it could be either Bullish or Bearish.

Tasuki Gap Patterns Guideline

What is the Tasuki Gap Pattern ?

Tasuki Gap pattern is a formation of 3 successive candlesticks that indicate that the current trend may continue. In other words, it’s a continuation Pattern. There is a gap between the 1st and the 2nd candles that must be offset by the 3rd candle. Furthermore, the 1st and the 2nd candles follow the direction of each other whereas the 3rd candle always goes against them. In fact, the Tasuki Gap Pattern could form many times during a strong trend where volume is high and price spread is also high. However, the more time the pattern appears, the stronger the trend. Also, the wider the gap between the 1st and the 2nd candles, the stronger the trend.

UPSIDE Tasuki Gap Pattern Example

Tasuki Gap pattern is a formation of 3 successive candlesticks that indicate that the current trend may continue. In other words, it’s a continuation Pattern. There is a gap between the 1st and the 2nd candles that must be offset by the 3rd candle. Furthermore, the 1st and the 2nd candles follow the direction of each other whereas the 3rd candle always goes against them. In fact, the Tasuki Gap Pattern could form many times during a strong trend where volume is high and price spread is also high. However, the more time the pattern appears, the stronger the trend. Also, the wider the gap between the 1st and the 2nd candles, the stronger the trend.
UPSIDE Tasuki Gap patterns explained

This pattern tells us that the market sentiment is bullish and that investors are optimistic about the future price of the asset. Regardless, the 3rd candle is Bearish because the traders are a little worried that the asset may become overbought and a reversal may occur. However, this fear is offset by a Bullish 4th candle that forms above the 3rd candle.

Example

This pattern tells us that the market sentiment is bullish and that investors are optimistic about the future price of the asset. Regardless, the 3rd candle is Bearish because the traders are a little worried that the asset may become overbought and a reversal may occur. However, this fear is offset by a Bullish 4th candle that forms above the 3rd candle.
Example Taskupa Pattern

DOWNSIDE Tasuki Gap Pattern Example

The DOWNSIDE Tasuki Gap Pattern also referred to as the Downward Tasuki Gap Pattern is a Bearish pattern that appears only during downtrends. Similar to the UPSIDE Tasuki Pattern, the DOWNSIDE Tasuki Pattern contains 3 successive candles. The 1st candle is a long bearish candle that gets the price down. Then comes the 2nd candle which is also bearish. The 2nd candle’s size doesn’t matter as long as it leaves a gap below the 1st candle. Then comes the 3rd candle. It must be bullish, and it fills the gap left between the 2 candles. The size of the 3rd candle doesn’t matter either as long as it does the job, the important thing is that it mustn’t be a DOJI.

DOWNSIDE-Tasuki-gap-pattern

This pattern tells us that the market sentiment is bullish and that investors are optimistic about the future price of the asset. Regardless, the 3rd candle is Bearish because the traders are a little worried that the asset may become overbought and a reversal may occur. However, this fear is offset by a Bullish 4th candle that forms above the 3rd candle.

Example

As follows, is the price chart of “SOCIETE GENERALE”, a French bank. The Downward Tasuki Gap Pattern appeared 3 times during the period going from March to July. The price of the asset was in a towering uptrend when the Bearish pattern 1st appeared. At that time, The bears tried to reduce the price, but they ended up failing. As the power of the Bulls was much stronger, the prices kept on rising. However, once the price of the stock reached the top, the pattern appeared twice in less than 2 weeks. Confirming the start of a downtrend as the 4th candle of each pattern closed lower than the 3rd candle.
Example DOWNSIDE Tasuki Gap

How to trade with the Tasuki Gap Pattern ?

The following strategy that we’re going to apply now works on every asset in any market. No matter the time frame, you can trade on a short-term basis or a long-term basis. Yet, we advise you to trade on a time interval between 1 to 3 months to have an accurate prediction and astonishing results.

 

Trading based on the Upside Tasuki Gap

When the upside Tasuki pattern appears, it’s advised to enter a long position to lock in the highest possible profit.

There are 2 possible entry points, one has a high risk and the other has a low risk. Of course, the high risk could generate a much higher profit than the low-risk point.

  • High-Risk entry point: You can enter the market during the formation of the 3rd candle while assuming that the uptrend will continue. And without getting confirmation from the 4th
  • Low-Risk entry point: You can enter the market when the price of the 4th goes above the high or close of the 3rd

Example

As follows, is the price chart of the Gold. The pattern has appeared during an uptrend to indicate the continuation of the trend. Furthermore, the 4th candle confirms the pattern.

A trader can enter a long position either during the formation of the 3rd candle or he can wait for the price of the 4th candle to go above the close of the 3rd candle. It all depends on the investors’ risk tolerance.

How to Trade UPSIDE pattern GOLD chart

Trading using the Downside Tasuki Gap Pattern

When the downside Tasuki pattern appears, it’s advised to enter a short position or to put a stop-loss order immediately.

There are 2 possible entry points for a short-position trader, one has a high risk and the other has a low risk. Of course, the high risk could generate a much higher profit than the low-risk point.

  • High-Risk entry point: You can enter the market during the formation of the 3rd candle while assuming that the downtrend will continue. And without getting confirmation from the 4th
  • Low-Risk entry point: You can enter the market when the price of the 4th goes below the low or open of the 3rd candle

Example

As an example, we’re going to analyze the price chart of the “iShares Russell”. The pattern has appeared during a Downtrend which indicates that prices may continue to fall. The 4th candle confirmed that the downtrend will continue.

A risk-loving trader may enter the market during the formation of the 3rd candle. In other words, when the price goes to the lowest possible point of the day. However, a risk-averse trader may wait for the 4th candle, where the price goes below the low or open of the 3rd to enter the market.

How to Trade DOWNSIDE Gap candlestick pattern

Conclusion

  • Tasuki Gap Candlestick is a continuation pattern.
  • There are 2 kinds of Tasuki patterns: bearish and bullish.
  • The 2 first candles must follow each other while the 3rd candle goes against them.
  • The 4th candle should be like the 1st 2 candles, else the trend won’t be confirmed.