May 9, Everyone knows that crows are omens, foreshadowing bad news on the horizon.

Three White Soldiers Three Black Crows Forex Trading Strategy

In the world of Japanese candlesticks, crows take the shape of three descending candlesticks, which form a stairway to lead the price downward. To learn more about the prophecy of the Three Black Crows pattern, flap your wings and soar on down. Ideally, it will open in the middle price range of the previous day. This signal indicates a reversal from a bear market to a bull market. For three successful days, they march down those steps, creating a firm reversal. The Three Black Crows pattern is most useful for long-term traders.

The second and third candles must be approximately the same size, to show that the bears are firmly in control. If the third candle is clearly smaller than the others, this indicates weakness and the pattern is not as reliable as it might have been otherwise.

Check out the examples below to test your knowledge of the Three Black Crows candlestick pattern. In our first example, the Three Black Crows appear after a brief uptrend. As we move through the pattern, the three candles gain length: This progressive lengthening bodes well for the reversal, and as expected, a strong downtrend materializes soon afterward.

In our next example, after some ebbs and flows, a mid-sized uptrend appears.

Doji - Wikipedia

At the top, following a long-legged doji, Three Black Crows land on the chart. Although the bears have made a strong showing and exhibited their strength, they fail! This example shows why you should always wait for confirmation.

A bullish candle appears after the Three Black Crows, and the price then surges upward in a spirited uptrend. The bears have failed in their quest. One might debate whether our third example qualifies as a Three Black Crows candlestick pattern.

Do you know why? In a way, it lacks the very first criteria we mentioned above: If you count those tiny candles as an uptrend, this is indeed a Three Black Crows pattern. As expected, the price dips after the signal appears. Someone might try to claim that this is a Three Black Crows signal as well, but unfortunately, it lacks the overlapping quality of the signal.

There are gaps between the 2nd and 3rd candles and the 3rd and 4th candles, disqualifying it.

The first appears after a noteworthy uptrend: As expected, the price then plummets. Although the bulls attempt to raise the price again forming a tiny uptrend , the bears will not let them win.

They send in another Three Black Crows. When you spot Three Black Crows, you had better sit up straight and pay attention. This pattern is unusual and powerful. However, before making a rash decision, it is always best to stop and confirm your suspicions that the momentum is truly changing.

Candlestick Pattern Dictionary [ChartSchool]

Our methods are simple, yet powerful. We look for stocks positioned to make an unusually large percentage move, using high percentage profit patterns as well as powerful Japanese Candlesticks.

Investing and Trading involves significant financial risk and is not suitable for everyone. No communication from Rick Saddler, Doug Campbell or this website should be considered as financial or trading advice. All information is intended for Educational Purposes Only.

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