Upside Tasuki Gap

What Is an Upside Tasuki Gap?

An Upside Tasuki Gap is a three-bar candlestick formation that is normally used to signal the continuation of the current trend.

1. The main bar is a large white/green candlestick inside a defined uptrend.
2. The subsequent bar is another white/green candlestick with an opening price that has gapped over the close of the previous bar.
3. The third bar is a dark/red candlestick that somewhat closes the gap between the initial two bars.

Figuring out the Upside Tasuki Gap

The Upside Tasuki Gap exhibits an uptrend's strength through the gap open of the pattern's subsequent candle, as well as its heightening price. The pattern's third candle shows a delay in the trend as the bears endeavor to move the price lower yet can't close the gap between the first and second candle. The bear's failure to close the gap recommends the uptrend will probably proceed.

Traders may likewise allude to the pattern as a Bullish Tasuki Gap or the Upward Gap Tasuki. Its adverse partner, which happens in a bearish market, is known as a [Downward Tasuki Gap](/disadvantage tasuki-gap). The two patterns are predicted to have originated from Japanese technical analysis.

The Upside Tasuki Gap is one of many gap patterns that can form all through a bullish trend. Supporting uptrend gap patterns are likewise normally utilized related to the Upside Tasuki Gap to add confirmation to a bullish trading strategy.

Gaps are huge price changes that commonly happen starting with one trading day then onto the next. Common gap patterns form more than a few days of trading. It is entirely expected to see the price of an asset close a price gap previously made. Some of the time traders push the price higher too rapidly, which can bring about a slight pullback. The dark/red candlestick that forms the Upside Tasuki Gap acts as a period of minor consolidation before the bulls keep on sending the price higher.

Upside Tasuki Gap Within an Uptrend

Upside Tasuki Gaps can happen whenever during a bullish trending pattern. Bullish patterns normally follow a cycle that starts with a breakaway gap affirming a reversal and afterward several runaway gaps followed by an exhaustion gap. As the price of a security trends higher, it frequently forms a ascending channel. Traders build the pattern by drawing two vertical slanting lines at the pinnacle and trough levels of price action. An Upside Tasuki Gap can happen inside an ascending channel that likewise incorporates one or several of the gaps referenced previously.

Reasonable Example of Trading the Tasuki Gap

David detects an Upside Tasuki Gap on the iShares 10+ Year Investment Grade Corporate Bond ETF chart and needs to utilize the pattern to enter a trade and set risk boundaries. He could enter on the close of the third red candle at $62.97 and place his stop-loss order underneath the low of the principal candlestick at $62.08. On the other hand, David could place a buy stop order somewhat over the pattern's second candlestick high at $63.39 to affirm the uptrend has continued and set his stop under the third candlestick's low at $62.93.

Highlights

• Traders frequently utilize other gap patterns related to the Upside Tasuki gap to affirm bullish price action.
• The Upside Tasuki Gap's third candle to some extent closes the gap between the initial two bars.
• The Upside Tasuki Gap is a three-bar candlestick formation that signals the continuation of the current uptrend.