Downside Gap Three

The Downside Gap Three candlestick pattern is a three-candle bearish continuation pattern that according to Bulkowski, behaves as a bullish reversal pattern 62-percent of the time.

Occurring in strong down trending market, the Downside Candle Three is a pattern whereby:

The first two candles are regular sized bearish candles with an unclosed gap between the two candles. Their price wicks cannot touch or overlap.

The third and final candle is a larger bullish candle that moves upward and closes the gap created by the first two candlesticks.

For pattern confirmation, the downtrend should resume immediately after the first and second candle gap has been filled.


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