Three Black Crows Candlestick Pattern

The three black crows candlestick pattern suggests lower prices if it occurs after an uptrend. Each of the three black crows should be a bearish candlestick that closes near the lows of the day. The open of each of the black crows should be within the real body of the prior day's real body. A rare variant of the three black crows candlestick is the identical three crows, which occurs when the opening of the bearish candlesticks are roughly the same price as the close of the previous day. Nison (1991, p. 101) states that the identical three crows is an especially bearish pattern.

Three Black Crows Candlestick Chart Example

The chart above of the Silver ETF (SLV) shows a three black crow pattern forecasting a reversal of the prior uptrend. Prior to the three black crows, there was a five day uptrend made up of bullish candlesticks. The uptrend ended, however, when the market gapped up on the sixth day and proceeded to fall and eliminate the gains of the fifth day of the uptrend. As is typical with the three black crow pattern, each of the bearish candlesticks opened beneath the previous day’s open and then closed beneath the real body of the previous day’s bearish candlestick.

Works Referenced

1. Nison, S. (2003) The Candlestick Course. Hoboken: John Wiley & Sons.
2. Nison, S. (1994) Beyond Candlesticks: New Japanese Charting Techniques Revealed. New York: John Wiley & Sons.
3. Nison, S. (1991) Japanese Candlestick Charting Techniques. New York: New York Institute of Finance.
4. Rhoads, R. (2008) Candlestick Charting For Dummies. Hoboken: Wiley Publishing.
5. ThinkorSwim. (2011). ThinkorSwim Resource Center: Candlestick Patterns Library.