The Upside Tasuki Gap is an important candlestick formation to watch for traders seeking to capitalize on up trending stocks. This three-bar formation signals the continuation of a current uptrend and is characterized by a downward gap, then a bullish candle, followed by a second gap and a bullish candle that partially fills in the gap between the first two bars.

The significance of the Upside Tasuki Gap pattern lies in its inverse brother, the Downside Tasuki Gap. The Downside Tasuki Gap formation displays the opposite characteristics and signals the continuation of a downtrend.

When looking for the formation, it is important to note the direction of the gaps between the candles. The first gap separates the first and second candles and must be downward. Then, the gap between the second and third candles must be upward. This formation appears most often when an equity or index is trending upwards and can be seen on numerous time frames.

The Upside Tasuki Gap is not a trade setup by itself, as some traders prefer to wait for additional confirmation before entering a trade. One such example is looking for the two candles to close completely above the opening of the first candle. Additionally, some traders also rely on other gap patterns in conjunction with this formation as a means of confirming bullish price action.

Ultimately, the Upside Tasuki Gap is an important formation to be aware of for traders seeking to crack the code of profitable trades. While it is not a trade setup by itself, it serves as an important indicator of a potential upward trend in the market. The gap pattern is also an important contrast to its inverse structure, the Downside Tasuki Gap. By recognizing the characteristics of each of these patterns in their respective market environments, traders are better enabled to take advantage of trending markets.