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.

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RELATED FAQS
  1. How are Sanku (Three Gaps) patterns interpreted by analysts and traders?

    Find out how analysts and traders interpret a Sanku, or three gaps, pattern located within a bar chart or Japanese candlestick ... Read Answer >>
  2. How effective is creating trade entries after spotting a Sanku (Three Gaps) Pattern?

    Learn about the sanku, or three gaps, pattern including formation, interpretation and additional confirmation necessary to ... Read Answer >>
  3. How do I Implement a Forex Strategy when spotting a Sanku (Three Gaps) Pattern?

    Understand the significance of the sanku candlestick pattern, and learn a forex trading strategy to employ when recognizing ... Read Answer >>
  4. How do I build a profitable strategy when spotting an Sanku (Three Gaps) Pattern ...

    Understand the interpretation of the sanku candlestick pattern and learn how to create a profitable trading strategy based ... Read Answer >>
  5. How are Exhaustion Gap patterns interpreted by analysts and traders?

    Learn how to spot and interpret exhaustion gap patterns like traders and analysts do, and see why these patterns are considered ... Read Answer >>
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