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A bearish continuation pattern. A gap between bearish candles partially filled by a bullish candle - but the gap holds.
The Downside Tasuki Gap is a three-candle bearish continuation pattern. Two bearish candles create a gap down, then a bullish third candle opens within the second candle's body and rallies into the gap — but critically does NOT close the gap completely.
The partially filled gap is the key. The bullish third candle looks like it might reverse things, but it fails to fully close the gap. This failed recovery confirms that bears are still in control and the downtrend will likely continue from the gap area.
The Downside Tasuki Gap reveals a failed buying attempt within a downtrend. Candles 1 and 2 are bearish with a gap between them — sellers are firmly in control and the gap shows urgency to sell.
Candle 3 is bullish. Some shorts take profits, some bargain hunters buy, and price rallies back into the gap. This can momentarily look like a reversal. Hope flickers for those holding long positions.
But the rally fails to close the gap entirely. The gap remains partially open — a visible scar of selling pressure. This failed attempt to fill the gap confirms that sellers are stronger than buyers. The unfilled gap becomes resistance and the downtrend typically resumes.
Conservative: Enter short when price falls below Day 3's low, confirming the gap holds.
Aggressive: Enter short at close of Day 3 if it closes in the lower half of Day 2.
Above the high of the third candle (the bullish candle that partially fills the gap). If the gap fills completely, the bearish continuation is invalidated.
T1: Previous swing low. T2: Extension of the prior bearish move. The gap remaining open is the signal - momentum should continue lower. Trail stops using recent candle highs.
Minimum 1:2. The unfilled gap provides a clear stop level.
The Downside Tasuki Gap is a continuation signal — the key is that the gap remains unfilled. If the third candle closes above the gap entirely, the pattern is invalidated and a reversal may be underway instead.
Gap down followed by a bullish candle that doesn't fill the gap. Bearish continuation pattern.
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