Tasuki Gap — One Name, Two Opposite Verdicts From the Data

The Tasuki Gap is a rare case where textbook theory gets two completely different verdicts from the measurement — depending on direction. The upside variant roughly does what it promises: it continues the trend (a weak 57%, almost a coin flip), but the move after the breakout ranks among the best in the entire catalog — performance rank 5 out of 103 patterns. The downside variant does the opposite of what it promises: instead of continuing the decline, it reversed upward in 54% of cases. Same name, same construction mirrored — and two opposite practical conclusions. Anyone teaching "Tasuki gap = continuation" without distinguishing the variants is teaching half the truth, and the other half is the expensive part.

What the Pattern Looks Like

The Tasuki Gap is a three-candle pattern that comes in two mirror-image variants:

Upside Tasuki Gap:

• Trend before the pattern: up.
• Candle 1: white — an ordinary bullish candle within the ongoing trend.
• Candle 2: white, with an upward gap. The key condition: the gap must occur between the shadows of the candles, not just between the bodies — the chart is left with a hole where no trade was ever transacted.
• Candle 3: black. It opens inside the body of the second candle and closes inside the gap — but doesn't close it. The gap (measured by bodies) stays open.

Downside Tasuki Gap: the exact mirror — a black candle in a downtrend, a second black candle with a downward gap (shadows not overlapping), then a white candle that opens inside the body of the second and closes inside the gap, without closing it.

The psychology of the structure is elegant: the gap shows the strength of the dominant side, and the third candle is a counterattack — an attempt to close the gap that doesn't succeed. The theory says: since the pullback couldn't even fill the hole, the dominant side returns and the trend keeps going. It sounds logical. The problem is that narrative logic and measured outcome are two different things — as you'll see below.

One fundamental caveat for readers of this blog: on crypto spot, the Tasuki Gap doesn't exist. A 24/7 market doesn't have gaps — every BTC/USDT candle opens at the close of the previous one. Look for this pattern on stocks, indices, and CME bitcoin futures, where weekend gaps are routine.

What the Numbers Say

Statistics from Bulkowski's tests (~4.7 million daily candles, US stocks) — and the standard caveat up front: this is a measurement from the stock market on the daily interval. Crypto is a different volatility regime and a market without gaps, so the numbers can't be carried over 1:1.

Upside Tasuki Gap:

• Continuation: 57% of cases. Directionally in line with the theory, but Bulkowski calls it flat out "almost random" — don't try to guess the breakout direction.
• Performance rank: 5/103. This is the true star of the pattern: only four patterns in the entire catalog have a better 10-day move after the breakout.
• Best average 10-day move: −9.20% — in a bear market, after a downside breakout (rank 2/103). The threshold for a "good" move is 6%, so this is an outstanding result. Note the irony: the best move after a "bullish" continuation pattern happened to the downside.
• Frequency: 74/103, 704 instances found in 4.7 million candles. Rare — a sample sufficient for directional conclusions, but without excessive precision.
• Price target achievement: at best 38% (bear market, upside breakout) — less than two times out of five.

Downside Tasuki Gap:

• Instead of continuing the decline — a bullish reversal in 54% of cases. The pattern works opposite to the theory, though again at an "almost random" level. In the reversal ranking it sits at 47/103.
• Performance rank: 23/103. Decent — the trend after the breakout (in either direction) tends to be solid.
• Best average 10-day move: +4.69% — in a bear market, after an upside breakout. Below the 6% threshold, but again: the best move after a "bearish" pattern went up.
• Frequency: 68/103 — rare, though not exotic.

Three pointers from Bulkowski's encyclopedia worth knowing: both variants perform best in the bottom third of the yearly price range; the upside Tasuki most often breaks out upward; a downside Tasuki appearing after 4-6 weeks of a down move often precedes a reversal — which nicely explains why the measurement found "bullishness" in it.

How to Trade It (and How Not To)

How NOT to trade it: symmetrically. The biggest mistake is treating both variants with the same rule — "Tasuki = continuation." The measurement says the upside variant is a continuation (weak on direction, strong on magnitude), while the downside variant is more often a reversal. A "textbook" short on the Downside Tasuki Gap is a play against the data.

Scenario 1 — Upside Tasuki: wait for the breakout, don't guess. Since the direction is 57/43 and the strength of the post-breakout move is near the top of the catalog, a sensible sequence is: mark the pattern's range (the high and low of the three candles) and only enter once price closes outside it — in the breakout direction, even if that's down. Rank 2/103 for a downside breakout move in a bear market means a "broken" bullish Tasuki can be a better short than many bearish patterns are longs.

Scenario 2 — Downside Tasuki: a warning sign for bears. If you're holding a short in a downtrend that's lasted 4-6 weeks and a Downside Tasuki Gap appears — the measurement suggests tightening the stop or taking partial profit, since the probability of an upward reversal edges out continuation. Aggressive traders may look for a long after a close above the pattern's high; conservative traders simply don't open new shorts here.

Scenario 3 — the gap as structure. An unclosed gap is the most concrete thing the pattern leaves on the chart: a level where the market never traded. If it later gets fully closed, that negates the pattern's narrative — making it a natural reference point for the stop. Read more about gaps acting as support and resistance in the article on the Rising and Falling Window.

Stop loss and target. For trading an upside breakout of the Upside Tasuki: stop below the pattern's low (beneath the gap), target at the nearest resistance. For a downside breakout — the mirror image. Target completion rates of 38-44% teach humility: take profit in pieces, don't wait for the textbook measured move.

Myth vs Measurement

Myth: "The Tasuki Gap is a reliable continuation pattern." Measurement: the upside variant continues 57% of the time, the downside variant... reverses 54% of the time. Direction is nearly a coin flip in both cases, and in the downside variant the coin lands against the theory more often.

Myth: "The third candle must close the gap, because every gap gets closed." Measurement: the pattern's definition explicitly requires the gap to stay open — and window statistics show that while the median time to close a gap is indeed days, the mean is weeks to months, because some gaps stay open for a very long time. "Every gap must get filled" is a slogan, not a law of physics.

Myth: "Since the pattern is bullish, I only trade longs." Measurement: the strongest average move after the Upside Tasuki Gap (−9.20% over 10 days, rank 2/103) came after a DOWNSIDE breakout in a bear market. This pattern's value lies in the strength of the post-breakout move, not its direction — anyone ignoring downside breakouts is throwing away the best part of the statistic.

Myth: "You can trade Tasuki on BTC too." Definition: no gap, no Tasuki, and a 24/7 spot market doesn't have gaps. That leaves stocks, indices, and CME bitcoin futures with their weekend gaps.

Example Scenario

A stock in an uptrend, in the bottom third of its yearly range (the context the measurements prefer). A white candle, the next day a gap up and a second white candle — the shadows don't touch. On day three a black candle dips into the gap but doesn't close it: an Upside Tasuki Gap is complete. What do you do? Nothing — yet. You mark the top and bottom of the pattern and wait for a close outside that range. A close above the top: go long, stop below the gap, target at the nearest resistance, take partial profit (remember: the target is only hit in a minority of cases). A close below the bottom: don't mourn a long that never happened — statistically those are exactly the breakouts that produced the biggest moves, so at least you're not standing in their way.

Quick checklist:

• Is there a gap between the shadows of candles 1 and 2 — a real hole on the chart?
• Is candle 3 the opposite color, opening inside candle 2's body and closing inside the gap without closing it?
• Do you know which variant you have — and remember that the downside one reverses more often than it continues?
• Are you waiting for a close outside the pattern's range instead of guessing the direction?
• Are you trading a market with real gaps (stocks, indices, CME) — not 24/7 spot?
• Stop near the gap, a modest target, profit taken in pieces?

The Tasuki Gap is a great lesson in reading statistics with understanding: "57% continuation" sounds boring until you notice the performance rank of 5/103 — and conversely, "bearish continuation pattern" sounds scary until the measurement shows it more often ends in a rally. The practical takeaway is simple: don't trade the pattern's name, trade what's been measured. And what's been measured is that Tasuki doesn't tell you where — only that once it breaks out, it tends to go far.

FAQ

Rafał — Krypto Bez Ściemy

Trader and founder of Strefa Tradingu. He’s been breaking crypto down on YouTube for years — no hype, no signals, with a focus on market structure and risk management.

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