Meaning Of Three Black Crows

Three Black Crows - Hopping and Skipping into a Bearish Market

Three black crows is the opposite of three soldiers who appear at the bottom of an uptrend. We can say that the reverse is true. Three black crows signify the beginning of a bearish market trend.

Three black crows, like three white soldiers, also belong to the Japanese candlestick chart family. These charts are widely used by technical traders to predict trends and understand market movements. Three consecutive black candlesticks moving downwards form the three black crows. This is a strong indicator of a bearish trend turning.

How to Identify Three Black Crow Candlestick Designs

Three black crows form a visual pattern. It is not a calculation.

It forms usually during an uptrend and consists of three long-bodied candles that create a downward movement. Each candle opens in the same place as the last and closes lower than its predecessor. It looks like a staircase on a chart. It is a sign that the end of a bullish trend has come and gone, according to traders. The candles are long real-body and have no shadows or short shadows, indicating that bear forces have pulled down the market to close near the bottom. These candles might appear after a Doji which is a sign of market indecision. To take their positions, traders wait for the formation process to finish.

Key Tips

• Three black crows that form during an uptrend often signify the end of a bull market
• It's a grouping of three candles with long bodies and a declining closing price.
• Each candle is designed to open within the body of its predecessor, but it is optional.
• It could form close to a Doji, which is a phase in market uncertainty before the trend reverses.
• The uptrend is when the first candle forms, while the next two appear during a downtrend.
• A bullish trend is ending, which means traders should take profits and exit or enter bullish trades.
• It's the reverse of three white soldiers.

Creating a Trading Strategy around 3 Black Crows

Three black crows are subject to the same caution as three white soldiers. This requires confirmation from technical indicators like relative strength index (RSI). The formation of a three-back crow candlestick pattern with a well-formed three-back crow candlestick pattern can be a strong indicator that a trend is about to reverse. However, traders need to take into consideration the volume of each session as well as any trend before it to place their bids. Long bodies are usually a sign that a session has been sustained for a long time and bearish trends have kept market prices low. It is confirmed by either a short or long shadow. Traders can plan to exit early and enter quickly to make a profit before the market changes. It could be a temporary change in market sentiment, not a trend reversal.

Strong indications also exist for market movements before the appearance of three black-crow candlestick patterns. Small bullish patterns are common in charts that lead to long black candles. A small number of bullish candles indicates that bullish traders were able to keep the market up until bearish forces took over.

Before taking a position on the market, traders must confirm trend reversal. It could be temporary overselling or a brief phase of consolidation. Traders should be aware of this.

Three Black Crows and Three White Soldiers

Three black crows are reversed to show three white soldiers. These appear in a downtrend and signify a bullish trend reversal. Three white soldiers, also known as three red soldiers or marching troops, are some other names for the three white soldiers. It's a group of three long-bodied candles that gradually rise in price, with each one closing at a higher value than the last. To confirm a trend change, both the three black crows as well as three white soldiers will need to be confirmed by other indicators.

Conclusion

Crows can be feared and bring bad news. This chart pattern may have been named because it indicates that a bullish trend is ending. This suggests that bullish strength has waned after a run and that bearish pull is in control. Like other candle formations however, three black Crows has its limits. You should confirm with other market tools before you trust it blindly. This can lead to a bearish period where the market oscillator is above 70, which could indicate a temporary overselling condition.