Three Black Crows Candlestick: A Trader’s Guide




The “three black crows” candlestick pattern is a bearish one that may indicate the end of an upswing. Candlestick charts display the opening, high, low, and closing prices for financial assets during the day. For assets that are increasing, the candlestick is either white or green. As they disappear, they are either red or black.

Three lengthy candlesticks that opened within the body of the preceding candle and closed lower than the previous candle make up the black crow motif. The three black crows candlestick pattern should form at the peak of the price increase for a high winning percentage. There is a lower chance of success when this candlestick pattern comes in a sideways or volatile market.


Finding the three black crow chart designs is not too tough. Finding an upswing and three bearish candlesticks with lengthy bodies in a row is all that is required.

  • As a continuation of the present upswing, long-bodied bearish candlesticks that combine with the first candlestick of this pattern must be generated. A bearish candle indicates that the closing price should be lower than the start price since the bears are trying to decrease prices.
  • The second candlestick should likewise have a bearish candle. It might have a long or short body. The first candle’s actual body, or the area between its closing and midpoint, should represent the opening price of this candlestick. The second candle shouldn’t exceed the first candlestick’s height.
  • The third candlestick should also have a bearish candle. Its body might be either long or short. The initial price of this candlestick should be at the second candle’s midpoint, its ending price, or anywhere else in its actual body. The third candle should not fall below the height of the second candlestick.


The ideal working environment for three-black-crow patterns

Convergence is the use of additional technical trading tools to find superior and very probable trade opportunities in the forex market.

The three convergences for this candlestick pattern are listed below.

  • Before the entrance of the three black crows, the market should have been in a positive trend. In an unstable market, it won’t be effective.
  • It needs to grow at the primary resistance levels or supply zone.
  • Only trade this pattern when the RSI indicator shows overbought circumstances.


Table of Information on THREE BLACK CROWS

Structures Description
the quantity of candlesticks THREE
Prediction Reversal of the bearish trend
Prior Trend Bullish Trend
Counter pattern Three white soldiers

What does it mean to traders?

The market’s bearish trend is being reversed, according to the three black crows candlestick pattern.

Price value will rise during an uptrend. In price swings, technical analysis will provide a series of higher highs and higher lows. The only way that prices move is through wave cycles.

An upward trend is shown by higher highs and lower lows. It indicates that in the market, buyers are more powerful than sellers.

A series of lower lows and lower highs, on the other hand, indicates a bearish trend. Lower lows after higher highs indicate a price trend reversal in the opposite direction.


The three black crows pattern also indicates a bearish trend reversal on lower timeframes because of a series of three continuously negative candlesticks. A Three Black Crows candlestick pattern so verifies a price turnaround in the downward trend.

How can three black crows be traded?

This candlestick pattern should not be used as the basis for a trade entry due to several limitations. Low-risk/high-reward ratio; does not project level of profit.

It might be challenging to start a sell position in an asset that is already oversold when the market is being heavily depressed by the body of three bearish candlesticks. Using the candlestick pattern in trading is a fantastic strategy to maximize your profits. That is a longer-term analysis.

Call to action

Trading method 

We would absolutely try the following methods to grow a trading plan with the three black crows!

Trading Strategy 1: Range

Each of the three consequent candles must have a more range than the previous candle. This assures that the market continues on its new course, maybe as more investors realize they should sell their investments.

As a result, the rules for going short become:

Our design consists of three black crows. The range of each candle in the pattern grows in comparison to the previous candle.

Then, after five bars, we leave.


Trading Strategy 2: an Overbought Filter

Prior to entering a trade while trading the three black crows, we want to confirm that the market has moved substantially to the upside. The RSI could be used to explain this strategy. One of our favourite indicators is the RSI, which shows overbought conditions when it rises above seventy. So, in our trading strategy, that will be the condition we use.

Three black crows can be seen here.

The RSI reading taken on the bar before the pattern is higher than seventy.

Once the RSI closes below fifty, we then close the trade.


Pros and Cons 

A few of the three black crows pattern’s most significant benefits and drawbacks are as follows.

Pros Cons
Simple to recognize and trade In consolidating market situations, it could generate wrong signals.
frequently occurs on all currency pairs, commodities, and stocks Trading on daily, weekly, and monthly timescales can be costly.
ideal for reversal trading and trend entry Able to arrange a late market entry

Saman Ali

Saman Ali is a Professional Financial Researcher, Quantitative Analyst and an Experienced Writer for more than 5 years. Saman’s main passion is for Cryptocurrencies, Stocks, Forex and Blockchain Technology. She holds an MBA in Finance and has specializations in producing high quality content about Cryptocurrencies, FX, Broker’s review, Price Predictions, Fundamental & Technical Analysis, and Educational Content.

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