Upside Tasuki Gap

Upside Tasuki Gap: The Bullish Continuation Signal

Updated: 2026-03-01 · Expert Analysis by Senior Trading Analyst

1. Introduction: The Unfilled Gap

The Upside Tasuki Gap is a rare but powerful continuation signal derived from Japanese rice trading methodology. "Tasuki" comes from a Japanese word for a type of cord or sash used in traditional clothing — the name refers to the visual "crossing" effect of the third candle partially entering the gap zone. The key message of this pattern is simple: when a market gaps higher and then a profit-taking session cannot even fill that gap, it tells you the underlying bullish demand is overwhelming the short-term selling pressure.

2. How to Identify It

The Upside Tasuki Gap requires three specific candles in sequence:

• Candle 1 — Long Bullish: A strong green candle continuing the uptrend. Volume should be healthy, confirming the move is institutionally driven.
• Candle 2 — Gap Up Bullish: A second green candle that opens with a gap above the close (or high) of Candle 1. This gap represents a surge of overnight buying enthusiasm.
• Candle 3 — Partial Gap Fill: A red (bearish) candle that opens within the body of Candle 2 and sells off, closing inside the gap zone — but crucially, does NOT close below the top of Candle 1 (i.e., does not fully fill the gap).

The decisive rule: if the red candle closes below the top of Candle 1, the gap is filled and the pattern is invalidated. The gap must remain open to confirm bullish continuation.

3. The Psychology Behind It

The Upside Tasuki Gap tells a story of relentless bullish demand outpacing short-term profit-taking. Candle 1 builds the momentum. Candle 2 represents a surge of confidence — possibly triggered by news, earnings, or institutional buying — that creates a clear price gap. This gap itself is a statement: the market did not want to trade at the previous day's prices at all. When Candle 3 forms, it represents traders taking short-term profits or bears attempting to fade the move. But their effort is cut short. The selling cannot overcome the residual buying demand sitting in the gap zone. When the trading session ends with the gap still open, it signals that the bulls absorbed all the selling and the uptrend remains fully intact.

4. Two Trading Strategies

Strategy 1: Gap Support Entry

Enter long when the third candle closes within the gap (confirming pattern), using the gap zone as a support level.

• Entry: Long at the close of Candle 3.
• Stop-Loss: Below the bottom of the gap (the high of Candle 1).
• Target: Project the height of the Candle 1-2 move upward from Candle 2's high, or use the next resistance level.

Strategy 2: Candle 2 High Breakout Entry

Wait for price to break above the high of Candle 2 after the pattern forms — a more conservative entry that provides an additional confirmation of resumed momentum.

• Entry: Long on a break above the high of Candle 2 on the session following Candle 3.
• Stop-Loss: Below the low of Candle 3.
• Target: Measured move equal to the gap size projected above Candle 2's high.

5. Common Mistakes Traders Make

• Gap fully filled: If the red candle closes below the top of Candle 1, the gap is gone and the bullish story changes significantly. This pattern is only valid while the gap remains open.
• Treating it as a reversal signal: The red Candle 3 can fool traders into thinking the uptrend is reversing. Always count the pattern in context — the red candle is the "test" that the gap passes.
• Using it on intraday charts: The gap is the soul of this pattern. Intraday charts rarely produce meaningful overnight gaps, so the pattern loses statistical relevance below the daily timeframe.
• Ignoring volume: Declining volume on Candle 3 (the bearish day) is ideal — it shows the selling is weak. High volume on Candle 3 is a warning that the selling pressure may be more significant than the pattern alone suggests.

6. Upside Tasuki Gap vs. Rising Window

The Rising Window (known in Western analysis as a "Gap Up") is a simpler bullish continuation signal — just two consecutive candles with an open gap between them. The Upside Tasuki Gap adds a third candle that tests the gap and fails to fill it, making it a more rigorous confirmation signal. If you see a Rising Window, you cannot yet confirm the gap will hold. The Upside Tasuki Gap gives you that third-candle proof. It is the Rising Window's stronger, more confirmed cousin.

7. Frequently Asked Questions