Candlestick patternsTasuki Gap
A gap in the trend that a counter-candle fails to fill — a continuation signal.
Works best in trending marketsEngine-computed on a fixed sample series
What the Tasuki Gap is
The Tasuki Gap is a three-candle candlestick pattern that signals the continuation of an existing trend rather than a reversal. Its essence is a gap in the direction of the trend that a subsequent counter-move tries, but fails, to close. In an uptrend, the upward version shows price gapping up and then pulling back part way, but not enough to fill the gap, so the gap survives and the trend structure stays intact. Because gaps represent a decisive shift in sentiment, a gap that holds against a pullback demonstrates that the trend still has the upper hand. The pattern exists in both directions — an upward Tasuki Gap in an uptrend and a downward one in a downtrend — and in each case the unfilled gap is the whole point. It answers the question: was that pullback strong enough to threaten the trend, or did the trend absorb it and carry on?
How the pattern forms
The upward version forms in three steps during an uptrend. First a candle continues the advance. Second, the next candle gaps up — opening above the prior candle's high, leaving an empty price gap — and closes higher still, a strong continuation candle. Third, a counter-candle opens lower, within the body of that second candle, and sells off, closing down into the gap area but critically not all the way through it, so the gap between the first and second candles is not fully filled. The two same-colour trend candles followed by the failed counter-candle complete the pattern. The downtrend version is the exact mirror: a down-candle, a gap-down down-candle, and then an up-candle that rallies into but does not close the gap. The survival of the gap is what confirms the trend rather than the pullback is in control.
Reading it, step by step
First establish the trend, because the Tasuki Gap only means continuation if there is a clear trend to continue. Next identify the gap created by the second candle and confirm it opened cleanly in the trend's direction. Then focus on the third, counter-trend candle: the key judgement is whether it closes the gap or not. If it pulls back into the gap but leaves part of it open, the pattern is valid — the counter-move lacked the strength to reverse the trend, and the unfilled gap now becomes a support shelf in an uptrend or a resistance shelf in a downtrend. If instead the third candle fully closes the gap, the pattern is void and the pullback may be turning into something more serious. So the read hinges entirely on that one question: did the gap hold?
Best timeframes and context
As a gap-based pattern, the Tasuki Gap depends on the existence of gaps, which makes it most useful on charts and markets where gaps actually occur — daily charts of individual stocks, which routinely gap between sessions, are the natural habitat. On weekly charts the signal is more significant but rarer. It is far less useful in continuous 24-hour markets such as spot FX and crypto, where true gaps are scarce and the pattern seldom forms. There are no numeric settings, only the judgement of what counts as a clean gap and a genuine trend. The pattern is stronger when the trend is well established and when the gap forms at a meaningful spot, such as a breakout from consolidation. Volume expanding on the trend candles and lighter volume on the failed counter-candle reinforces the continuation message.
When and where to use it
Use the Tasuki Gap as a continuation signal to add to or hold a position in the direction of an established trend, primarily on daily stock charts where gaps are common. It is most valuable during a strong, ongoing trend when you want confirmation that a small pullback is just a pause rather than the start of a reversal. The unfilled gap gives you a precise, logical level to lean on for stops. Avoid relying on it in gapless markets, where it rarely appears, and avoid reading it in the absence of a clear prior trend, since a continuation pattern needs a trend to continue. Also be wary if the gap forms after an already extended move, because a late-stage gap can be an exhaustion gap that soon fills, inverting the message. Context around the gap matters as much as the pattern itself.
Strategies that use it
The core strategy trades in the trend's direction on the resumption after the pattern: in an uptrend, enter long as price turns back up following the failed counter-candle, placing the stop on the far side of the gap so that a full gap-fill takes you out, and target the next resistance or a measured extension of the trend. A second strategy uses the pattern as a hold-and-add signal for an existing position, adding size on the confirmation that the gap held and trailing the stop to just below the gap. A third, more conservative approach waits for a close back above the counter-candle's high in an uptrend before entering, requiring proof that the trend has actually resumed. In every version, a close that fills the gap is the invalidation point and the cue to stand aside, since the continuation thesis has failed.
Combining it with other indicators
Because the Tasuki Gap is a continuation pattern, it works best alongside tools that confirm a trend is in force. A moving average or ADX verifies the trend the pattern is meant to continue, keeping you from reading continuation into a market that is actually ranging. Volume is an important companion: heavier volume on the trend candles and lighter volume on the failed counter-candle supports the idea that the pullback was weak. Momentum indicators such as MACD can confirm that trend momentum remains intact through the pullback. The unfilled gap itself often coincides with a support or resistance level, and confluence with a prior swing point strengthens it as a shelf to lean on. The pattern supplies a precise entry and stop within a trend that these other tools confirm is genuine and still healthy.
Where it fails
The clearest failure is a filled gap: if the counter-candle, or a later candle, closes the gap entirely, the continuation signal is void and momentum may be turning, so trading it as continuation after the fill is a mistake. It also fails without a genuine prior trend, since there is nothing to continue and the shape becomes meaningless. In continuous markets that rarely gap, the pattern seldom forms cleanly and forcing the read invites error. A subtle trap is the exhaustion gap late in an extended trend, which looks like a Tasuki Gap but soon fills and reverses, so the position of the gap within the larger move matters. And like all candlestick patterns, it is only a short-term signal that can be overwhelmed by larger forces or news. The safeguard is to require a clear trend, treat the gap-fill as a hard invalidation, and mind where in the trend the gap appears.
A worked example
Suppose a stock is in a daily uptrend. Candle A rises and sets a high of 30.20. Candle B gaps up, opening at 30.50 — leaving an open gap between 30.20 and 30.50 — and closes strong at 31.20, a clear continuation candle. Candle C then opens lower at 31.00 and sells off, closing at 30.60; it has pulled back into the gap zone but stopped well above 30.20, so the gap is not filled and the pattern is a valid upward Tasuki Gap. You enter long the next session as price turns back up above 31.00, placing your stop at 30.15 just below the bottom of the unfilled gap, so that a full gap-fill would take you out. Price resumes the uptrend and reaches 33 over the following week, and you trail your stop up under successive support as the trend carries on — the failed pullback having confirmed the buyers were still in charge.