Also known by the Japanese word sanku, the Three Gaps candlestick pattern contains (surprise, surprise!) three distinct gaps.
Although there are two different versions of the signal (one bearish, one bullish), today, we are focusing on the Three Gaps Up pattern, which looks like a small staircase with gaps between some of the gangly stairs.
This strong, defined upward trend may indicate that a reversal is on the way.
The Three Gaps Up pattern is not a tremendously popular signal.
The three gaps must all be independent, and within a clear, current trend...either going up or going down. When the third gap shows up, the Sanku pattern says that trend is about to reverse.
The bulls will turn into bears, or the bears will turn into bulls.