Sanku (Three Gaps) Pattern


DEFINITION of 'Sanku (Three Gaps) Pattern'

The Japanese word for a candlestick pattern that consists of three individual gaps located within a well-defined trend. After the appearance of the third gap, the pattern is used to suggest an impending reversal in the direction of the current trend.

BREAKING DOWN 'Sanku (Three Gaps) Pattern'

This pattern is used by traders to predict situations of exhaustion and change in a trend. Ultimately, the current trend is said to be reversed when the price of the asset fills the third gap. Technical traders should not rely solely on the three gaps pattern to predict a reversal; rather, they should combine this technique with other technical indicators.

  1. Exhaustion

    Situation in which a majority of participants trading in the ...
  2. Trend

    The general direction of a market or of the price of an asset. ...
  3. Gap

    A break between prices on a chart that occurs when the price ...
  4. Reversal

    A change in the direction of a price trend. On a price chart, ...
  5. Candlestick

    A chart that displays the high, low, opening and closing prices ...
  6. Pattern

    In technical analysis, the distinctive formation created by the ...
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  1. How do I Implement a Forex Strategy when spotting a Sanku (Three Gaps) Pattern?

    A forex trading strategy can easily be implemented to profit from a market reversal signal that comes from the sanku, or ... Read Full Answer >>
  2. How are Sanku (Three Gaps) patterns interpreted by analysts and traders?

    Three gaps patterns appear in price charts when three separate gaps occur within the same trend. In Japanese candlestick ... Read Full Answer >>
  3. How effective is creating trade entries after spotting a Sanku (Three Gaps) Pattern?

    The sanku pattern, also known as the three gaps pattern, is unusual among reversal signals. Because it is comprised of three ... Read Full Answer >>
  4. How do I build a profitable strategy when spotting an Sanku (Three Gaps) Pattern ...

    A trading strategy that can be used when a trader recognizes a sanku pattern seeks to profit from a market reversal. The ... Read Full Answer >>
  5. What are some of the most common technical indicators that back up Doji patterns?

    The doji candlestick is important enough that Steve Nison devotes an entire chapter to it in his definitive work on candlestick ... Read Full Answer >>
  6. Tame Panic Selling with the Exhausted Selling Model

    The exhausted selling model is a pricing strategy used to identify and trade based off of the price floor of a security. ... Read Full Answer >>

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