Posted in Finance, Accounting and Economics Terms, Total Reads: 399
Definition: Sanku (Three Gaps) Pattern
Sanku is a Japanese word meaning candlesticks. These are patterns that look like candlesticks consisting of three individual gaps that are located within a well defined trend of a stock. As the third gap appears in the pattern, it suggests that there is a slow reversal in the pattern in which the current trend is moving. If it showing a bullish trend it will change to a bearish trend and if it is showing a bearish trend it will move to a bullish trend.
The Sanku Pattern is a type of pattern used by traders during technical analysis of a stock for predicting situations when there is a change in trend. The price of an asset is said to be reversed when the third gap is filled by the price of that asset.
However, it is not advisable for the technical traders to rely solely on the three gap patterns but it is better to combine this technique with other technical analysis patterns.