Downside Tasuki Gap Pattern on a Live Gold Chart

What it shows

Each one gets a red label marked DTG over the high of the third candle.

How Pravex works it out

1. The first two candles must both be falling (close below open). The second candle’s high must be below the first candle’s low, a full gap.
2. The third candle must be rising and open inside the second candle’s body, edges included.
3. It must close above the second candle’s high and below the first candle’s low: inside the gap, which stays partly open.
4. No average body is used, so the candles can be of any size.
5. A downtrend is required for the downside tasuki gap, measured on the first of the three candles, and with the default it comes down to one comparison: is that close below the average of the last 50 closes?

Settings

Setting	Default	What changing it does
Trend check	SMA50	How the downtrend before the downside tasuki gap is measured on the first candle: SMA50 compares its close with the 50-candle simple average. The choice that adds SMA200 also needs the 50-candle average below the 200-candle one, so fewer downside tasuki gap labels appear, and the last choice turns the check off.
Label colour	Red (#F23645)	Colours the DTG label that sits over the high of the candle completing the downside tasuki gap, with the DTG letters always in white.

How traders read it

The gap is the sellers’ mark. The rising third candle is buyers trying to close it, and the pattern is about them failing: the close lands inside the gap and not above it. The gap then acts as resistance, and the fall is read as continuing.

The top of the gap, the first candle’s low, is the line to watch. A later close above it fills the gap and cancels the reading.

When it misleads

It needs a full gap between two candles, which spot gold seldom makes because it trades nearly around the clock; expect very few labels, mostly around a pause in trading. The candles have no size test, so a tiny third candle that drifts into the gap passes too. One close under the 50-candle average counts as a downtrend. A downside tasuki gap label on the newest candle is provisional: that candle has not closed, and the shape may stop holding before it does.

Questions and answers

What is a downside tasuki gap?

Three candles in a fall: two falling candles with a gap down between them, then a rising candle that opens inside the second body and closes inside the gap.

Is the downside tasuki gap a reversal?

Bearish. The bounce failed to fill the gap, so the fall is read as going on.

What cancels a downside tasuki gap?

A close above the first candle’s low, which fills the gap.

Related: Upside Tasuki Gap - Bullish, Falling Window - Bearish, On Neck - Bearish, All Candlestick Patterns, every indicator.