Bearish Downside Tasuki Gap Candlestick
First day is a red day
Second day is a red day that gaps downward
Third day is a blue day that closes within the gap of the first two days
The first two candles of this formation continue a downtrend with the second red candle gapping, suggesting strong bearish sentiment. A blue candle on day three indicates investors taking advantage of low prices to buying. But when the third days price action does not fill the gap created between the first and second days candles, traders take this formation as a sign that the downward trend may likely still continue.
But like so many moderate strength formations, Candlestick analysts like to see additional confirmation. This confirmation of continued bearish trend could come in the form of another red candle upon day four
Continuation pattern discussed above will not be seen while currency trading.
Although, the gap between the first and second candles simply suggests that downward price momentum continued after exchange hours, something to take advantage of in FX Trading. An FX version of this pattern would have two large red candles suggesting strong downward momentum. The pattern being finished by a third blue day that should not close above the open of the previous candle. This FX version would be far less significant and quite common, requiring additional confirmation.
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