A worked example that explains the rule, not a real stock price. The ring marks the first close beyond the level. The blue line is the reference for the move. Orange is invalidation. Prices are in the right-hand column, and sessions are under the volume bar.Hollow green candles closed above their open, and filled red candles closed below it.
Numbers in the example chart
From the same calculation that draws the shape and writes the "Measuring the target" section below.
Trigger level
$51.0 · at the close of session 37
Reference
44.0$
Invalidation
53.6$
Chart span
60 sessions
What it is
Sessions isolated by two gaps: a gap up that opens above everything before it, then a gap down that closes below everything inside, leaving the sessions between them cut off from price on both sides like an island.
Everyone who bought inside the island is suddenly at a loss, which is why the reversal after it is sharp. It also appears inverted at lows: a downward gap isolates sessions below price, then an upward gap ends it, read the same way in the opposite direction.
When the trigger starts and when it fails
Signal
The close of the downside gap session, below the island's low.
A close back above the island's lowest price, which closes the second gap.
Reading it stage by stage
Upward gapAn open above the prior high · excitement that jumps over every standing offer.
IslandSessions that trade above the gap with no real progress, and its top is the highest point of the move.
Downward gapAn open below the island's low · everyone who bought inside it is suddenly at a loss.
RetestPrice may return toward the gap zone from below. A close above the island's low invalidates the pattern.
Recognition rules
An upward price gap (Price Gap): the low of the island's first session is higher than the high of the session before it.
An island runs about 3 to 30 sessions. Shorter than that is a passing jump, and longer is an ordinary range.
A downward gap ends it: the high of the next session is lower than the island's low.
The two gap zones overlap in price, so the island is cut off on both sides.
Volume is high, especially in the two gap sessions.
Measuring the target
There is no agreed way to measure the target. The usual reference is the origin of the rise before the island. In the example, the downside gap session closes near $51.0, the rise started at $44.0, and invalidation is a close back above the island's low at $53.6.
Where it fools you
A gap caused by an earnings release or a dividend payout is not a structural island, and on timeframes shorter than daily almost every open makes a gap. Closing the second gap cancels the pattern.
An island of two sessions may be a passing event that closes within days. Fewer sessions do not mean a stronger signal.
The first gap may be a continuation gap in the middle of a trend. Do not read it as an island until the second gap actually arrives and a session closes below the island's low.
Open the daily timeframe for any symbol and draw the pattern yourself. Your drawing is saved per symbol in your browser, and the terminal does not name or detect the pattern.
━ LevelThe two gaps
⇕ MeasureTarget equals pattern height
We do not detect chart patterns with a numeric rule: telling them apart takes judgment on the chart. Candlestick patterns with a numeric rule are detected daily by the candlestick pattern scanner.
The mirror image: the bullish island reversal
The same pattern turned upside down, with the same rules in the opposite direction: what was a top becomes a bottom, and the trigger, target and invalidation all flip direction.
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