3 Black Crows Candlestick Pattern

A 3 Black Crows candlestick pattern is a group of 3 bearish candlesticks that typically lead to a rapid decrease in a stock’s share price. The 3 Black Crows candlestick pattern can appear anywhere in a downtrend.

• When the Three Black Crows candlestick pattern develops at the beginning of a downtrend, it helps to establish the downtrend’s footing
• When the pattern develops in the middle of a downtrend, it usually signals that the downtrend is approximately half-way over
• When the pattern develops at the end of a downtrend, it usually signals capitulation by the sellers

The first “Crow” in a 3 Black Crows candlestick pattern could also be another bearish reversal candlestick pattern, such as a Bearish Belt Hold candlestick pattern, a Dark Cloud Cover candlestick pattern or even a Bearish Engulfing candlestick pattern.

Requirements

Following are the requirements for a 3 Black Crows candlestick pattern.[s2If !current_user_can(access_s2member_level1)]…..

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• Its pattern consists of 3 candlesticks, each with a red colored real body
• Each of the 3 bearish candlesticks has a large real body and closes consecutively lower than the preceding candlestick

Characteristics & Observations

These are some of the characteristics and my observations for 3 Black Crows candlestick patterns.

• Most times it is a continuation pattern, meaning it continues the downtrend that is currently in place however as noted above when it ends in climax volume it can also represent a short-term bottom
• The most common places to find this series of candlestick patterns is at the beginning of a new downtrend, in the middle of a downtrend, and near the end of a downtrend

Resistance Area

Resistance for a 3 Black Crows candlestick pattern is located between the bottom of the 1st bearish candlestick and the top of the 3rd bearish candlestick in the pattern.

Bullish Counter-Part

The bullish counter-part to a 3 Black Crows candlestick pattern is a 3 White Soldiers candlestick pattern.

By the time a 3 White Soldier or a 3 Black Crows candlestick pattern has completed its development, a substantial percentage of the shorter-term move has already been made. When the pattern is noticed late (like after the development of the second candlestick), it is usually best to wait for the next pullback into the support or resistance area before taking action. That is, unless you are day trading and available to monitor the development of the 3rd candlestick in the pattern.

Trading Strategies

The size of the middle and third candlestick can help determine if the selling is losing steam or if it is still gaining momentum.

• If the real bodies of the candlesticks are progressively getting smaller in each of the 3 Black Crow candlesticks, the selling rally is running out of steam and a short-term consolidation period may be approaching which may offer an entry point to go long on the stock
• If the real bodies of the 3 Black Crows candlesticks are of equal size or are getting larger, the selling rally is still strong or possibly even gaining momentum – waiting on the sidelines to monitor support areas is the safest move

Real Chart Examples