Three Gaps Up Candlestick Formation
Description
The ideal Three Gaps Up candlestick formation is composed of 4 candlesticks. The first 2 candles can be either red or green, as long as the body of the second candle gaps above the body of the first. The third and fourth candles should be be green, and both bodies should gap above the previous body. This is a reversal pattern which warns of an overextended move.
A more general version of Three Gaps Up candlestick formation is to watch a bull market move and keep an eye out for 3 gaps up during the move which do not get filled. Once the third gap is in place, start looking for the bear market to run out of steam and reverse.