What is a Tasuki Gap Candlestick Pattern?
A Tasuki Gap is a three-candle continuation pattern where price gaps in the direction of the trend, and the third candle pulls back into that gap without closing it.
You'll see two candles pushing hard in the same direction with a visible gap between them. Then a third candle fights back the other way — but only partway. The gap stays open. The failed retracement is the signal.
What Does a Tasuki Gap Candlestick Pattern Indicate?
The trend is still in control. The first real counter-move couldn't even close the gap — meaning the other side showed up, took a swing, and couldn't finish the job.
The gap itself shows urgency and imbalance in the trend direction. When the third candle tests that imbalance and can't erase it, the counter-pressure fails.
Is the Tasuki Gap Candlestick Pattern Bullish or Bearish?
It depends on the trend it forms in. An upside Tasuki Gap in an uptrend is bullish. A downside Tasuki Gap in a downtrend is bearish.
The pattern confirms the direction already in play. Context matters more than the candles themselves.
How to Identify a Tasuki Gap Candlestick Pattern?
You need three things: a clear trend, a gap between candles 1 and 2 in the trend direction, and a third candle that bites into the gap without closing through it.
- Trend context: Upside version after an uptrend. Downside version after a downtrend. No trend means no signal.
- Candles 1 and 2: Two candles in the trend direction with a visible gap between them (up-gap in uptrends, down-gap in downtrends).
- Candle 3: A counter-trend candle that opens inside candle 2's body and closes somewhere inside the gap area.
- The rule that matters: The gap stays open. If candle 3 closes through the far side of the gap, it qualifies as a gap fill instead — a different pattern with different implications.
How to Trade a Tasuki Gap Candlestick Pattern?
Treat the third candle as a pullback. Enter on continuation. Stop where a gap fill proves you wrong.
- Upside Tasuki Gap entry: Long on a break and close above candle 2's high — or on a strong bullish confirmation candle right after candle 3.
- Downside Tasuki Gap entry: Short on a break and close below candle 2's low — or on a strong bearish confirmation candle right after candle 3.
- Stop loss: Beyond the gap invalidation point. Usually past candle 1's low (upside) or high (downside), or past the far edge of the gap zone.
- Targets: The next swing high or low in the trend direction. Or the next major support/resistance level on the same timeframe.
🔥 Pro Tip: Don't enter just because you see the pattern. Confirmation is your trigger. Trading "textbook setups" without confirmation is how accounts get chopped up.
What Happens After a Tasuki Gap Candlestick Pattern?
Price usually resumes the prior trend — often after a retest of the gap area. That gap zone becomes a reference point. Dip-buyers reload there. Sell-the-rally traders fade there. Trapped counter-trend entries scramble to exit there.
The most common failure is a decisive gap fill followed by acceptance through the gap. When that happens, the read flips from "failed pullback" to "trend exhaustion" — and you're often looking at a deeper retracement or full reversal.
⚠️ Warning: A gap fill is your invalidation. Don't argue with it. Don't move your stop. The pattern told you the gap shouldn't fill — and now it did.
What are the Different Types of Tasuki Gap Candlestick Patterns?
Two versions exist with the same structure but opposite direction.
- Upside Tasuki Gap: Forms in an uptrend. Up-gap between candles 1 and 2. Bearish third candle pulls back into the gap but can't close it. Reads as bullish continuation.
- Downside Tasuki Gap: Forms in a downtrend. Down-gap between candles 1 and 2. Bullish third candle retraces into the gap but can't close it. Reads as bearish continuation.