Three Black Crows

The Three Black Crows is a bearish candlestick pattern used in technical analysis. It's seen as a signal of a strong reversal in an uptrend.

The bullish version of this pattern is the Three White Soldiers pattern.

Here's a breakdown of the Three Black Crows pattern:

  1. This pattern consists of three consecutive long-bodied candlesticks that have opened within the real body of the previous candle and closed lower than the previous candle. In other words, each day opens slightly higher than the previous day's close, but then the price reverses into a downtrend and ends near the day's low.

  2. The color of the candles is black or red, indicating that the closing price is lower than the opening price.

  3. The pattern typically appears after a significant uptrend, signaling that the uptrend could be ending and a new downtrend might be beginning.

  4. Each of the three "crows" should be a significant bearish candlestick, not just a small downward move. The longer each candle, the more bearish the pattern.

Like with all candlestick patterns, the Three Black Crows should be used in conjunction with other indicators or forms of technical analysis for confirmation. Traders often look for increasing volume during the three-day period as further confirmation of a reversal.

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