Three Black Crows candlestick pattern – reversion signals

How to use Three Black Crows candlestick pattern
How to use Three Black Crows candlestick pattern

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In trading currencies, stocks, and virtual currencies, you have heard about Three black crows. This is a trend reversal warning candle pattern, but not everyone can understand its meaning.

Candlestick pattern Three black crows are visual models that are useful by difficulty at an easy level. This article explains and guides the most basic usage to help you choose the most effective trading strategy.

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Three black crows

Three black crows candlestick patterns appear when prices are developing on an upward trend. At the end of this uptrend, small bearish signals will begin to appear. In the end, there will be 3 consecutive bearish candles with the closing price of each candle nearly equal to the bottom of each candle. Form a ladder that is easy to recognize.

This bearish ladder signal indicates that the price will begin to reverse to the downtrend to combine with other indicators. As a result, you will know when the price quickly reverses.

Three black crows candlestick pattern definition and uses
Three black crows candlestick pattern definition and uses

Identifying characteristics

This pattern has 3 candlesticks in a row of descending. The close of each candle will be close to its bottom (shadow).

The actual survey showed that the model of three black crows often appeared when there was news affecting the market.

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Meaning of the model Three black crows

Three black crows are easy to recognize without any calculations. The longer the candle size will make more sense the price will go down, the short candle size shows the high probability of a pullback. Also taking into account the case the candle bottom is far away from the closing price, the farther the bottom is, the higher the probability of an uptrend. Because the Three black crows are models where their candles have a closing price equal to or close to the bottom.

How to deal with Three black crows

Indicators supporter

Three black crows cannot be used as a signal leading model but only as a support. The effect of supporting the indicator of the Three black crows model is very good. For example, when the RSI indicator is overbought for a long time then the Three black crows pattern appears and the RSI tends to go down, this is definitely the time for the price to reverse.

Three black crows pattern uses with psi
Three black crows pattern uses with psi

Short shadow

The shorter the shadow of the candlestick, the higher the reliability of the pattern, the closing price is equal to the bottom, the highest reliability model.

Long candles

The longer the candle, the more strongly it shows that the price is being strongly impacted. Because when seeing such a decline, most Traders will be startled and follow the trend.

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Three Black Crows candlestick pattern – reversion signals
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