Three Black Crows Pattern

Three Black Crows is a three-candle bearish continuation pattern.

The first candle of the pattern is a strong bearish candle. The open price of the next candle is within the body of the previous bearish candle. It closes lower than the previous candle low and turns out to be another bearish candle. The next candle also opens within the body of its previous candle and closes lower than the previous candle low. This formation is known as a Three Black Crows candlestick pattern.

Therefore, the Three Black Crows is a series of three bearish candlestick pattern. The middle and last candle opens within the bearish body of the previous candle and closes lower than the low price of the previous candle.

This formation is bearish and shows the strength of the bears.  But at the same time, it also indicates exhaustion because price has been going down in last three sessions. There is a possibility of at least a pause. If this pattern is followed by a price consolidation or sideways and price corrects to the body or high of the middle candle, then it provides a bearish pullback trade opportunity of selling at retracement when the price pattern is bearish.

In real life, you may not get the same size bearish candles in the Black Crows pattern. The body of the bearish candles shouldn’t be narrow to qualify for this pattern. If the body of the third candle is narrow, it indicates the possibility of the exhaustion. The chances of sideways of consolidation are more in such cases.

Click here to learn more about the pattern.

This pattern can be plotted on the chart by adding it from the Add study menu in TradePoint & Patterns in RZone. The pattern is also available in the System Builder section. By combining this pattern with other patterns and indicators, you can create your own trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.