Mastering Market Trends: Understanding the Three Black Crows Candlestick Pattern

Dive deep into the Three Black Crows candlestick pattern, a key indicator used by traders to predict bearish reversals. Learn its formation, significance, and comparison with Three White Soldiers for better trading decisions.

Three Black Crows is a powerful bearish candlestick pattern that may predict the reversal of an uptrend. In candlestick charts, this pattern indicates three consecutive days where the prices open within the previous candle’s body and close lower, foretelling a potential downturn.

Key Insights

  • Bearish Reversal Indicator: The Three Black Crows pattern signals the end of an uptrend, suggesting that sellers are currently dominating the market.
  • Confirmation Tools: Traders often use other technical indicators like the Relative Strength Index (RSI) to confirm the pattern’s predictions.
  • Evaluation by Size and Shadow: The size of the three candles and their shadows can provide additional clues about the pattern’s reliability. Longer bodies and shorter shadows make the signal stronger.
  • Opposite Signal: The counterpart to Three Black Crows is the Three White Soldiers pattern, which indicates a reversal of a downtrend.

In-Depth Explanation

The Three Black Crows pattern forms when bearish sentiment overtakes bullish momentum across three consecutive trading sessions. Here, the price progressively closes at or near its low, resulting in long-bodied candlesticks with minimal or no shadows.

Example of Three Black Crows

Traders see these sustained bearish sessions as the beginning of a broader downtrend:

  1. Each session opens slightly higher but closes decisively lower, demonstrating consistent bearish pressure.
  2. Observers interpret short or nonexistent wicks as signals of strength in the downward movement.
  3. Prices gradually suggest the market’s new direction is indeed downward.

How to Leverage Three Black Crows Effectively

Traders should use the Three Black Crows pattern as a cue rather than a solitary indicator. This involves seeking confirmation from other tools and indices:

  1. Long-bodied Candles: These three candlesticks should ideally be long-bodied to confirm a strong bearish sentiment guiding the market.
  2. Volume Indicators: Use trading volume to validate the pattern. High volume during these bearish sessions can confirm that many traders are actively supporting the downtrend.

Three Black Crows vs. Three White Soldiers

The Three White Soldiers pattern, which also appears in a sequence of three long-bodied candlesticks, unfolds at the end of a downtrend, predicting an upward reversal. Similar factors—body size, absence of shadows, trading volume—also apply for confirmation in this bullish reversal.

Recognizing Pattern Limitations

Overextended moves below previous support lines might flag oversold conditions, detected with indicators like RSI or stochastic oscillators.

  1. Patterns Completing Resistance at key levels might hint at either a continued downfall or significant consolidation before another move lower.
  2. Traders ought to reinforce their strategies with additional indicators and verify potential oversold states to manage risks optimally.

Real-World Example: The 2018 GBP/USD Scenario

In May 2018, a Three Black Crows pattern appeared on the GBP/USD weekly chart indicating bearish dominance.

  1. Steep Bullish Trend Reversal: The existing uptrend showcased bulls’ strength reversing to bearish dominance.
  2. Minimal Wick: Short wicks on candles confirmed sustained bearish pressures.


The Three Black Crows pattern, when methodically interpreted with additional confirmation tools, enables traders to confidently predict and profit from bearish reversals, refining their entry and exit strategies to mitigate risks and enhance returns.

Related Terms: Technical Indicators, Candlestick Charts, Bearish Reversal, Three White Soldiers.


Get ready to put your knowledge to the test with this intriguing quiz!

--- primaryColor: 'rgb(121, 82, 179)' secondaryColor: '#DDDDDD' textColor: black shuffle_questions: true --- Certainly! Below are 10 quiz questions based on the term "Three Black Crows" from Investopedia, formatted in Markdown for Quizdown-js. ## What are the "Three Black Crows"? - [x] A bearish candlestick pattern indicating a potential reversal - [ ] A bullish market trend indicator - [ ] A type of trading algorithm - [ ] A strategy for buying options ## How many candlesticks form the "Three Black Crows" pattern? - [ ] Two - [x] Three - [ ] Four - [ ] Five ## Which direction do the candlesticks in the "Three Black Crows" pattern move? - [x] Downward - [ ] Upward - [ ] Sideways - [ ] Randomly ## In the "Three Black Crows" pattern, what is a common interpretation? - [ ] Continuing bullish trend - [ ] Unchanged market sentiment - [x] Bearish reversal - [ ] Oncoming bullish momentum ## What does it typically imply if "Three Black Crows" are observed in a chart? - [ ] A strong upward trend is expected - [x] A strong downward trend may be impending - [ ] No change in market direction - [ ] Market is indecisive ## How is the reliability of the "Three Black Crows" pattern often enhanced? - [x] By combining with high trading volume or other confirmation indicators - [ ] By recognizing it in a 15-minute interval - [ ] By observing it at the start of the trading session - [ ] By ignoring market sentiment ## What do each of the candlesticks in the "Three Black Crows" pattern look like? - [ ] Short bodies with short shadows - [x] Long bodies with little to no lower shadows - [ ] Long upper shadows and small bodies - [ ] Small bodies with no shadows ## During a "Three Black Crows" formation, the closing prices of each candlestick ideally are...? - [ ] Above the opening prices - [ ] Equal to the opening prices - [ ] Randomly placed across sessions - [x] Lower than the closing prices of the prior candlestick ## Which market condition is the "Three Black Crows" pattern traditionally observed in? - [ ] During market consolidation - [x] In an uptrend or bullish market signaling a reversal - [ ] In a sideways market movement - [ ] During a stable and non-volatile period ## Who should be particularly cautious when the "Three Black Crows" pattern appears? - [ ] Day traders - [ ] Long-term investors - [x] Investors holding long positions in the current uptrend - [ ] Those trading immediately following economic reports These questions will help quiz-takers understand the term "Three Black Crows," a bearish candlestick pattern indicative of a potential market reversal.