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Three Black Crows

Discussion in 'Traders Glossary' started by GlossaryEditor, Aug 15, 2015.

  1. GlossaryEditor

    GlossaryEditor Glossary Editor

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    Three Black Crows is a bearish candlestick reversal pattern. It looks like three side-by-side black candles, each of them has a lower close than previous one. The second and third candles should have an open price in the middle of previous candle body, and the close should be near the low price.

    Three black crows, in fact, is an opposite pattern to three white soldiers.

    [​IMG]

    You can get more information about the Three Black Crows pattern in the FPA's Forex Military School lesson on Triple Candlestick Patterns.

    Treatment

    Since three black crows is a reversal pattern, it is preferable, when it appears after a solid previous bullish trend or in the area of long-term highs. Major properties of three black crows are as follows:

    - Close prices should be near the low, i.e. candles should have very small lower shadows. If the shadow is absent so much the better;
    - The Open price should be near the middle of previous candle;
    - If the open price of 2nd and 3rd candles coincides correspondingly with the close price of 1st and 2nd candles, this pattern is treated as three identical crows and has greater bearish power;
    - The pattern treated as a stronger one, if it appears not just after a long-term upward tendency, but after a sideways consolidation that separates the uptrend and the pattern;
    - Preferably, the second candle will be bigger than the first one and the third will be at least the same size as the second.

    Here is a weekly chart of the AUD/USD. After a long-term uptrend, three black crows predefines an explosive plunge. The candles have very small lower shadows, and each consecutive candle is greater than previous one. This level of perfection is very rare.

    [​IMG]
     

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