Lesson T3.6 · 6 of 6 · Japanese candlesticks
Continuation candlestick patterns and how often patterns work
Continuation patterns say the trend is only pausing: rising and falling three methods, the tasuki gap, the three-line strike. The tests do not always agree with the theory: three methods continued the trend 71-74% of the time, but the three-line strike, meant as a continuation, reversed the price 65-84% of the time.
Terms in this lesson
- Candlestick chart
- The chart that shows the open, close, high and low price for each day.
- Stop-loss
- An order that sells automatically if the price falls to a level you choose.
Rising three methods and falling three methods
Definition
What is rising three methods?
A big rising candle, three small ones that drift lower, then another big rising candle.
The three small candles stay within the first candle’s range, between its high and low: buyers catch their breath, but sellers cannot push the price below where the move started. The fifth candle closes above the first one’s close. Falling three methods is the mirror image, in a downtrend.
- Continuation
The price rises towards 98. A big rising candle climbs from 97.86 to 100.86, then three small candles drift down to 98.86 without leaving its range. The fifth candle closes at 102.26, above the first, and the rise continues towards 107.
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Create a free accountTasuki gap: the gap that does not close
Definition
What is a tasuki gap?
Two candles in the direction of the trend, separated by a gap, then an opposite one that moves into the gap without closing it.
Upside tasuki gap, in an uptrend: a rising candle, then another that opens above its high, leaving a gap, then a falling candle that closes inside the gap. The theory: if sellers could not close the gap, the rise carries on. The downside tasuki gap is the mirror image, in a downtrend.
- Tasuki
The price rises towards 99.6. The next day it opens at 100.58, leaving a gap between 99.78 and 100.38. A falling candle closes at 100.13, inside the gap, and the rise continues towards 103.
Three-line strike: continuation in theory, reversal in the tests
Definition
What is a three-line strike?
Three candles in the direction of the trend, then a big opposite one that wipes out all three.
The downtrend version: three falling candles, each with a lower low, then a big rising candle that opens below the last close and closes above the first one’s open. Classic theory calls it a continuation pattern: after the “strike”, the fall should resume. The uptrend version is the mirror image: three rising candles, then a big falling one.
- Strike
The price falls towards 102.4. Three falling candles drop to 98.33. The fourth opens at 98.03 and closes at 103.03, above the first one’s open (102.43). The price then climbs towards 105.6.
Do they work? A scorecard for every candlestick pattern
Do they work?
How often the patterns called the direction
The best, almost 8 times in 10; many others, 5 or 6 times in 10.
Bulkowski’s figures from the candlestick lessons, tested on US stocks. At 50%, a pattern does no better than a coin toss.
For reversal patterns: how often the price reversed. For continuation patterns: how often the trend continued.
| Pattern | Right | Overall rank (of 103) |
|---|---|---|
| Bearish engulfing | 79% | 91 |
| Three black crows | 78% | 3 |
| Evening star | 72% | 4 |
| Upside tasuki gap | 57% | 5 |
A high hit rate does not mean a big move after the pattern, and a modest hit rate can come with good moves.
Lessons are educational. They are not a recommendation to buy or sell. Investing involves risk and you can lose money. Sources: Thomas N. Bulkowski, thepatternsite.com (rising and falling three methods, upside and downside tasuki gap, bullish and bearish three-line strike, plus the patterns on the “Do they work?” card: hammer, bullish and bearish engulfing, piercing pattern, bullish harami, dragonfly doji, morning and evening star, three white soldiers, three black crows), accessed 29 October 2026. The charts are teaching diagrams, not real prices.