Windows

A gap may open between the trading range of one period and the next. In Japanese candlestick charting, these gaps are called “windows”.

Windows are considered continuation patterns. Windows “opened” on the way up are bullish “rising windows”. “Falling windows” are bearish patterns formed on the way down.

The Japanese encourage trading in the direction of the window since these are often areas of support and resistance. The bottom of a rising window is an important support level. On the other hand, the top of a falling window is a critical resistance level.

A close below a rising window, or a close above a falling one, is considered a chart reversal pattern. The Japanese call this “closing the window”.

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