3 Black Crows candlestick pattern: A strong bearish reversal pattern

bearish trend

When candlestick forms the basis of trend analysis you need to be aware of all possible trend reversal patterns. These patterns should not be restricted to bullish trend reversal signal only but also the bearish trend reversal patterns.

One such pattern is discussed in my previous article Evening Star candlestick pattern.

3 black crows is yet another very strong 3 candlesticks bearish reversal pattern that when formed under right condition gives the best result.

It is very important for you to understand that it is not only important to make a perfect entry in the market with low price but you should also consider the importance of exit timing. The wrong exit from the market can cause huge damage to your profit margins.

These type of candlestick patterns can help you identify bearish trend reversal in the right time and help you decide your move.

So let’s start exploring the appearance, interpretations, and behavior of 3 black crows candlestick pattern and understand how to use them and under what conditions

The physical representation of 3 black crows candlestick

As the name suggests this bearish reversal pattern is formed by 3 candlesticks that are bearish in nature. The formation of each bearish candlestick has its own significance. This can be elaborated as

  1. The first bearish candlestick is usually with small body
  2. The second bearish candlestick is longer than the first candlestick and the close price is very near to its low. It’s better if there is no shadow at all
  3. The third bearish candlestick confirms the pattern with a long body. Ideally, it should not have a shadow or very small shadow is considerable.
3 black crows example__1
Source: Economic Times

Condition of use

The 3 black crows candlestick chart pattern gives a strong signal when formed after an uptrend and consolidation. If you find such pattern but cannot figure out a proper uptrend before this then it cannot be considered to form a 3 black crows candlestick pattern.

The previous session must confirm a proper uptrend with bullish candlestick and searching for consolidation.

Find other Candlestick Chart Patterns Here

Market interpretation of 3 black crows candlestick

This is formed after bullish trend where buyers were completely dominating the market, the bearish candlestick of 3 black crows candlestick patterns emphasize that the sellers are now becoming active in the market.

All those who have bought the shares have booked their profit and are now willing to leave the market.

Such activity by the sellers makes such price actions in the market

The formation of second and third bearish candlestick confirms that the sellers are now dominating the market and driving the trend in their direction. Everyone is willing to sell their shares and buyers have lost their strength. This is interpreted only when these candles do not have a shadow or very small shadow.

If shadow is formed than it can be said that sellers are not yet completely optimistic and such patterns cannot be considered as 3 black crows

3 black crows example__2
Source: Economic Times

Key elements to remember

  1. 3 bearish candlestick pattern giving strong bearish trend reversal signal
  2. Only helpful when forms after a strong proper uptrend otherwise not considered
  3. Bearish candles with no or very small shadow are only considered for second and third candlestick for confirmation of the pattern
  4. Need to get confirmed with technical indicators before you make any move.

Know how technical indicators work.

Bottom Line

3 black crows candlestick pattern is a very strong bearish trend reversal pattern. This can potentially misguide you giving a false signal if not interpreted according to the rules. A strong uptrend is a must before the formation of this pattern otherwise such patterns may not be considered as 3 black crows.

Always use confirmation strategy before performing any trade.

You can check which investment strategy fits you best

Post Author: Sushant Putatunda

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