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Definition

 

Bearish Downside Gap Three Methods consists of three candles. The first two days are black candles with a gap between them. The third day is a white candle, filling out the gap. It is the support of the inclining trend.

  • Trend: Continuation
  • Expected trend: Bearish
  • Previous trend: Bearish
  • Reliability: Low
  • Type: Bearish
  • Number: 3

Recognition

  • The market is in a downward trend.
  • The first two days are black candles with a gap between them.
  • The third day is a white candle, filling out the gap.

Interpretation

The second day opens with a gap and due to the panic, the gap will not be filled on the same day. On the third day, the mood is more optimistic and the white candle fills the gap between the first two days. The formation shows a reversal only in short-term, but the correction is not enough to reverse the trend.

Important factors

Bearish Downside Gap Three Methods is very similar to the Bearish Downside Tasuki Gap formation. However, the Bearish Downside Tasuki Gap does not fill the gap between the first two days. To make sure the trend is reversed, a confirmation on the third day is needed. The confirmation could come from a black candle with a downward gap or a lower closing price.