Candlestick formation · Bearish
What is it, in one line
Three consecutive rising windows, read as exhaustion rather than strength.
Bearish · 4 candles · verdict: rule and thresholds below
Three consecutive rising windows, read as exhaustion rather than strength. The engine checks the formation as an executable condition over open, high, low and close, with a trend filter applied before the count is kept.
Method
Four candles separated by three windows, each low above the previous high. The classical Japanese reading inverts the obvious one: three gaps in a row is not triple strength but a market that has run out of sellers to absorb, and sanku is treated as the point to take profit rather than to buy.
The traditional claim
Read as exhaustion after an advance — the rare formation whose direction is the opposite of its appearance.
How this detection is wrong
All three windows must clear the ATR floor. This is by construction one of the rarest formations in the set, and on any instrument that trades continuously it may not occur at all — an occurrence of zero here is a property of the market, not a failure of the rule.
Published so the count can be reproduced. Every figure below is a parameter of the rule, not a preference: change one and the occurrence count changes with it.
| Parameter | Meaning | Default |
|---|---|---|
| trendPeriod | bars of prior trend inspected | 5 |
| atrPeriod | bars of ATR used to size everything below | 14 |
| minGapAtr | gap between bars, at least, in ATR | 0.1 |
| minPriorSlope | prior slope must be above | 0 |
These share enough geometry that a detector can return more than one of them on the same bar. The engine reports every match rather than picking a winner.
What is a Three Gaps candlestick pattern?
Four candles separated by three windows, each low above the previous high. The classical Japanese reading inverts the obvious one: three gaps in a row is not triple strength but a market that has run out of sellers to absorb, and sanku is treated as the point to take profit rather than to buy. The detector also requires a prior uptrend, so the same shape in the wrong context is not counted.
Is the Three Gaps bullish or bearish?
It is read as bearish. Read as exhaustion after an advance — the rare formation whose direction is the opposite of its appearance.
When is a Three Gaps not a Three Gaps?
All three windows must clear the ATR floor. This is by construction one of the rarest formations in the set, and on any instrument that trades continuously it may not occur at all — an occurrence of zero here is a property of the market, not a failure of the rule.
How is a Three Gaps detected?
As an executable rule over open, high, low and close, with 4 named parameters — including bars of prior trend inspected 5, bars of ATR used to size everything below 14, gap between bars, at least, in ATR 0.1 — all published on this page so the count can be reproduced. Strict and loose variants are defined as well, so the sensitivity of the count to those thresholds is visible rather than assumed.
Measurement pending re-run
No hit rate is published here yet. The run that would supply one was computed on engine ca6d9e36c81c; the engine is now cfb08765de7c. Its candlestick rows included the still-forming bar, and it predates the chart formations entirely, so those figures have been withdrawn rather than published with a caveat. The definition above is unaffected: it is what the detector tests, and no re-run changes it.