What is the Three Black Crows Pattern?
Quick Answer: Three Black Crows is a bearish candlestick pattern of three consecutive long-bodied red candles closing lower, signaling potential trend reversal.
Understanding the Three Black Crows Pattern
Three Black Crows is a bearish candlestick reversal pattern consisting of three consecutive long-bodied bearish candles that close progressively lower. The pattern typically appears after an uptrend or at resistance levels, signaling that sellers have taken control and a downtrend may be beginning.
Three Black Crows
Found at top of uptrend - Strong bearish reversal
Key Characteristics:
- Three consecutive bearish candles
- Each opens within previous candle body
- Each closes progressively lower
- Little to no wicks (strong selling pressure)
- All three candles roughly similar in size
Signal Strength:
Very strong bearish reversal signal - sustained selling pressure over three sessions shows conviction
What This Pattern Shows:
Three consecutive days of strong selling where bears maintain control throughout each session. Each candle opens within the previous body but closes lower, showing consistent and building bearish momentum. The minimal wicks indicate sellers dominated from open to close without buyers able to mount any significant defense. This persistent selling over three sessions signals strong conviction that the uptrend has ended.
Trading Considerations:
- • Best after extended uptrend at resistance
- • Confirm with increasing volume on the three candles
- • Entry typically on break of third candle low
- • Stronger when candles have small/no wicks
Pattern Requirements
- Three consecutive bearish candles: Each candle must have a substantial body showing strong selling pressure
- Progressive lows: Each candle closes lower than the previous candle's close
- Minimal wicks: The candles should open near their highs and close near their lows, indicating relentless selling
- Context matters: Most reliable when appearing after an uptrend or at major resistance levels
Confirmation Factors
Look for the pattern near resistance or within a supply zone. Volume expansion on the three bearish candles adds conviction. Momentum indicators like RSI rolling over from overbought territory or MACD bearish crossovers strengthen the signal.
Entry Timing Options
Enter short after the third candle closes, or wait for a brief retracement to secure better risk/reward. Place stops above the pattern high (the first crow's high). Target nearby support levels or use trailing stops to capture extended moves.
Distinguishing Reversal from Pullback
In strong uptrends, Three Black Crows can represent a healthy pullback rather than full reversal. Check higher timeframes—if the weekly or daily chart shows intact bullish structure, the pattern may just be a correction. Combine pattern analysis with broader trend context and fundamentals to avoid premature shorts against dominant trends.
False Signals in Ranges
Within choppy, range-bound markets, bearish candlestick clusters form frequently but fail to follow through. Confirm with momentum breakouts below support or confluence with other bearish signals before committing capital.
Advanced Guidance
Build a repeatable, rules‑based process so decisions are consistent across sessions and instruments. Start from context (higher‑timeframe structure, positioning, macro tone), then define precise triggers and invalidation on execution charts. Track spread and depth so your order type matches conditions. Pre‑compute scenarios (breakout, fakeout, mean‑revert) and map actions for each to reduce hesitation.
Execution Framework
- Plan entries at levels with confluence (structure, momentum, time‑of‑day).
- Place stops beyond the logical invalidation, not arbitrary distances.
- Target at least 2–3R; scale out methodically and trail remainder.
- Avoid thin liquidity windows unless the setup explicitly requires it.
- Record slippage and spreads; poor fills can erase edge.
Review Loop
- Journal setups by session and pair to learn where they excel.
- Tag trades by catalyst (news, trend continuation, range breakout).
- Recalculate expectancy monthly; prune underperforming variants.
Risk Controls
Keep daily loss limits, reduce size after consecutive losses, and pause during regime shifts. Survival enables compounding; treat discipline and execution quality as part of your edge.
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