Window

The Windows are continuation patterns composed of two Japanese candlesticks with a “void” in between.

They are quite similar to what we call gaps in western technical analysis. A gap is a quotation hole between the close of a candlestick and the open of the next one.

The difference between a gap and a window is that, in a window, the quotation hole occurs between the extreme points of the previous session and the current session. The Windows are thus more restrictive than gaps and they are zones in which no quotation was made whatsoever.

You can see the difference between a gap and a window on the chart below.

The Windows are continuation patterns and they are more powerful than gaps as there is no exchange in the empty zone which reinforces the new resistance or support zone that’s created by the window. When a Window appears in a trend, it is considered unwise to go against this trend since the window reveals the strength of it.

Sometimes, a pullback can be observed in the Window zone, the Japanese call it “closing the window” while the western phrase is “fill the gap». When this happens, this pattern can offer opportunities to take position during the pullback. If a window appears in a downtrend and prices rise before closing the window, a selling position can then be launched, with an invalidation stop placed above the upper part of the window, just like in the example below.

The same goes for an uptrend where the stop is placed below the lower part of the window.