Upside Gap Three Method |
Characteristic of Candlesticks: Reversal
Relevance of Candlesticks: Bullish
Prior Trend of Candlesticks: Bullish
Reliability of Candlesticks : Recommended
Confirmation of Candlesticks: Reliable
Candlestick Patterns Key Reference |
DESCRIPTION
Upside Gap Three Method pattern is identified by two long bullish candlesticks with a gap upward between them during an uptrend.
The third bearish candlestick closes the gap between the previous two bullish candlesticks.
A support for an uptrend may be forming which caused by temporary profit taking.
PATTERN RECOGNITION
1. Upside Gap Three Method pattern can be identified by an uptrend.
2. Refering to above diagram, we will see two long bullish candestick with a gap between them.
3. Then we will see a third bearish candlestick which open within the previous candlestick's body.
4. The third bearish candlestick closes lower to fill up the gap between the previous two bullish candlesticks.
EXPLAINATION
In the Upside Gap Three Method pattern, market is in a strong bullish momentum.
The bullish move goes on further by the second bullish candlestick that gaps in the direction of an uptrend.
However notice that the third bearish candlestick opens well into the body of the second bullish candlestick and filling up the gap.
The closing gap may be recognised as supporting the current uptrend.
The gaps create excellent support and/or resistance points, which become evident after a period of time.
The gap of the previous two bullish candlesticks which filled by the third bearish candlestick which is the first gap of a move, it is called a reaction day which signal buyers to close their position. Normally this is defined as closing gap movement.
The Continuation Patterns imply that a trend has temporary paused and will continue its original trend rather than reversal.
POINT TO NOTE
The Upside Gap Three Method is similar to the Upside Tasuki Gap Pattern.
But the Bullish Upside Tasuki Gap Pattern is recognised by a gap in the first two candlesticks and it is not filled up by the third bearish candlestick.
CANDLESTICK PATTERNS KEY REFERENCE
Irrespective of Color (Can be bullish or bearish) |
Uptrend |
Consolidation |
Downtrend |
ANTICIPATED DIRECTION OF TREND
Lighter Arrow = Lower Probability
Solid Arrow = Higher Probability
More Likely to go sideway, Less likely to rally
|
More likely to rally, Less likely to go sideways
|
More likely to go sideway, Less likely to fall
|
More likely to fall, Less likely to go sideways |
