What Is a Downside Tasuki Gap?

A Downside Tasuki Gap is a candlestick formation that is commonly used to signal the continuation of the current 澳洲幸运5开奖号码历史查询:downtrend. The pattern is formed wh🔯en a series of candlesticks have demonstrated the following characteristics:

1. The first candle is red or back (down) within an existing downtrend.
2. The second candle gaps below the close of the previous bar and is also red (down).
3. The last bar is a white or green (up) candlestick that closes within the gap of the first two bars. It is important to note that the wꦕhite candle does not need to ꦡfully close the gap.

What Does the Downside Tasuki Gap Tell You?

The Downside Tasuki Gap (also known as the Bearish Tasuki Gap) is a three-candle 澳洲幸运5开奖号码历史查询:continuation pattern. Toไ spot this pattern, keep the following criteria i𝓡n mind.

First, a clear dow﷽ntrend must be present, and there must be a large red/down candle present (candlestick chart c🐭olors are customizable). 

Second, following the candle💦 above, the price must gap down and form another large ꦿred/black candle. 

Third, a white/green candle must follow the red/black candle. The green/white candle must open inside the red candle’s real body and close abov💛e it. This candle should not close the gap between the first two candles.

Of the three candles involved, the first t꧂wo must be red/black and the third will be green/white. To qualify, the second and third candles must be opposingℱ colors. 

The Downside Tasuki Gap pattern shows the power of the downtrend; the bears are in contro🔜l and exhibiting their strength. This downward strength is then amplified, shown by the🔜 price gapping lower and then a new red candle forming.

However, a pause follows this movemen💫t as the bulls attempt to force the price up. If the price is unable to fill the gap, and𓃲 the price starts to drop again, the bulls will likely flee, leaving the existing downtrend to resume.

Some traders opt to enter short near the close of the white candle, assuming the downtrend will continue. Others prefer to wait f♎or the price to drop below the low or open of the white candle. This pro🐷vides some confirmation that the price is dropping again and the downtrend may be resuming.

The Downside Tasuki Gap has a counterpart: the 澳洲幸运5开奖号码历史查询:UpsideTasuki Gap. It can be spotted by displaying the same cr💎iteria above, but in the opposite formation and during an uptrend.

Example of How to Trade the Downside Tasuki Gap

The Nvidia 🌼Corp. (NVDA) chart shows a downside Tasuki gap pattern. The price is in a short♉-term downtrend when the pattern appears. There is a down candle, followed by a gap into another down candle.

There is then an up candle that penetrates into the gap but doesn't close it.
Traders could enter short near the close of that white candle, with a 澳洲幸运5开奖号码历史查询:stop loss above the c﷽lose or above the high of the first candle in the pattern.

Followin💖g the up candle, the price moves lower. In𒉰 this case, gapping down again.

The downward mꦉovement is brief, though, and the price reverses higher shortly after.

The Difference Between a Downside Tasuki Gap and♑ a Down Gap Side-by-Side White Lines Pattern

The Tasuki gap down is partially filled by an up candle. A 澳洲幸运5开奖号码历史查询:gap down side-by-side white lines pattern is a gap down followed by side-by-side candles. The pattern also marks 澳洲幸运5开奖号码历史查询:a continuation of the current trend.

Limitations of Using the Downside Tasuki Gap

The pattern is three candles in a sea of other price bars. By f𝔉ocusing on this pattern a trader could lose context. For example, the short-term trend may be down when this pattern occurs, but the longer-term trend may be up. Therefore, the price may rise shortly after the pattern, in alignment with the longer and more dominant trend.

The pattern is not very common and therefore will present limited trading opportun𓄧ities♒.

As indicated, context is important in this pattern. The stronger the downtrend and selling pressure the more likely the price will continue lower. Although the price action is choppy, rangy, or in a weak trend, the o🐠dds of success on the pattern deteriorate. There is no indication of how far the price may fall, or if it will fall at all, after the pattern. This requires another form of analysis.

Before tr𝕴ading any candlestick patter♔n, look for historical examples of how the pattern performed, including both winners and losers.

The Bottom Line

A Downside Tasuki Gap is a pattern used in 澳洲幸运5开奖号码历史查询:technical analysis that represents a continued downturn in the price of an asset. This can signal to a trader that it is time to exit a posit🐬ion to avoid further losses or to not enter the position in the first place unless they are shorting the asset.