Three Black Crows

Three black crows is a candlestick charting pattern used in technical analysis — it is a bearish reversal pattern. As a trading signal, three black crows is the bearish counterpart to three white soldiers, a bullish reversal pattern. The three black crows pattern does not occur frequently. Three long-bodied black candles occurring on consecutive trading days, where each candle opens within the body of the previous candle and closes lower each day at or near the day’s low, characterize three black crows. Some market technicians believe an optimal three black crows pattern will have the second and third “soldiers” opening in the bottom half of the preceding day’s “soldier.” Technical analysts consider three black crows a signal that a security’s uptrend may have ended. However, although three black crows can indicate a reversal, if the candles are very long it can also indicate a security is oversold and set to rebound. Continued negative activity the day after the three black crows pattern manifests is one possible signal of further declines, but traders may want other technical indicators to confirm the pattern.

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