Candlestick Patterns
Upside / Downside Gap Three Methods
Two same-colored candles leave a real gap between their bodies, then a third candle opens inside the second body and tries to close the gap exactly.
Hit the gap-fill bullseye
Candles one and two are fixed: same color, with a genuine empty gap between their real bodies. Candle three's open is fixed too, it always lands inside candle two's body, which is part of the rule. Drag its close to try to land it exactly on the price that closes the gap, the near edge of candle one's body. The target rings behind the candle score how close you get, live, off the real gap size in this exact setup.
Drag the handle on candle three.
How it works
- Two candles, same color, real gap between the bodies. "Upside" gap three methods runs on two up candles with the second gapping above the first, "downside" runs on two down candles gapping below. The gap is measured body edge to body edge, wicks don't count.
- The third candle opens inside the second candle's body. Not before it, not beyond it, inside the real range of open and close. That's fixed in this drill so the drag only tests the part that actually varies: where the bar closes.
- A close near the near edge of the first candle's body fills the gap. That near edge, the top of an up gap's lower candle or the bottom of a down gap's upper candle, is the exact price this pattern is built to hit. Landing on it closes the gap with nothing left open.
- This is read as continuation, not reversal. The gap gets filled, but the two candles that created it were trending the same direction the whole pattern started in. A clean fill here is typically followed by the original trend continuing, the pause is the point, not a turn.
- "Very close" still counts in most references, "exact" is rare. Real closes cluster near the target rather than landing on it. The ring scoring below reflects that, a close fill and an exact fill are graded differently but both still describe the same pattern.
Where this breaks
A gap that fills all the way through the first candle isn't a gap-three-methods anymore
The whole pattern depends on the third candle stopping roughly where the gap started, not blowing straight through it. When the close drives deep into the first candle's body instead of stopping near its near edge, the pattern stops describing a pause in the trend and starts describing an actual reversal candidate, closer to a piercing line or dark cloud cover than a continuation setup. Traders who see any close inside the general vicinity of the gap and call it a fill without checking how far the close actually traveled past the target end up reading a reversal signal as a continuation signal, or the reverse, which puts them on the wrong side of the very next move. The gap either gets filled and the trend continues, or the close overruns the fill and something structurally different has happened.