Containing three bars, these candlestick patterns spot market swings.
Upside Gap Three Methods
It forms in a rising market and presents three candles. Like the first, the second candle features an elongated white body. Although a gap up exists between these first two candles, their shadows shouldn’t intersect.
Conversely, the last candlestick is black. It starts inside the first bar’s real body and ends inside the second one’s real body. This pattern is a bullish continuation even if the space between the white candles is sealed. Provided the white bars exceed the black one in volume, the third candle can be dismissed.
Downside Gap Three Methods
It’s characterized by a downtrend and three candles. The first two candles have a gap down separating their elongated black bodies. However, their shadows shouldn’t overlap.
In contrast, the last bar is white. It opens inside the first candlestick’s real body and closes inside the second one’s real body. Note that the pattern is a bearish continuation despite the filled space between the white bars.