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Anyway, by gap down, I mean that the second candle's high must be lower than the previous candle's low, creating a void or empty space between the first two candles.Īt this moment, there is nothing bullish about what I am describing, since the fact that the price gapped down is a very bearish indication. Gaps are know in Japanese technical analysis as windows, but I will call them gaps. The first candle should be red, indicating that the bears are in control. Another key point is that this formation usually has 3 candles, although my examples have 4. This formation is a bullish reversal pattern, and comes after a lengthy downtrend. If you don't know what an island is, then this post will be especially useful for you. These Japanese patterns are similar to what you may know as an island reversal. ![]() These two formations are quite rare, but when they do occur, they tend to be very powerful. |
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