Three Black Crows. Bear Market Candlestick Pattern. Series IIWere you ready or not with recent sell off on financial markets, - this one should be not a surprise.
It's been already discussed in publication " 👀 Three Black Crows. Bear Market Candlestick " , that in unfavorable macroeconomic conditions, the Three Black Crows pattern is generally quite common pattern. Three Black Crows. Bear Market Candlestick Pattern
Three Black Crows is a continuation pattern, being a term used to describe a bearish candlestick pattern that can predict a reversal in an uptrend.
Classic candlestick charts show "Open", "High", "Low" and "Close" prices of a bar for a particular security. For markets moving up, the candlestick is usually white, green or blue. When moving lower they are black or red.
The Three Black Crows pattern consists of three consecutive long-body candles that opened with a gap above or inside the real body of the previous candle, but ultimately closed lower than the previous candle. Often traders use this indicator in combination with other technical indicators or chart patterns to confirm a reversal.
Restrictions on the use of three black crows
If the "Three Black Crows" pattern has already shown significant downward movement, it makes sense to be wary of oversold conditions that could lead to consolidation or a pullback before further downward movement. The best way to assess whether a stock or other asset is oversold is to look at other technical indicators, such as relative strength index (RSI), moving averages, trend lines, or horizontal support and resistance levels.
Many traders typically look to other independent chart patterns or technical indicators to confirm a breakout rather than relying solely on the Three Black Crows pattern.
Overall, it is open to some free interpretation by traders. For example, when assessing the prospects of building a pattern into a longer continuous series consisting of “black crows” or the prospects of a possible rollback.
In addition, other indicators reflect the true pattern of the three black crows. For example, a Three Black Crows pattern may involve a breakout of key support levels, which can independently predict the start of a medium-term downtrend. Using additional patterns and indicators increases the likelihood of a successful trading or exit strategy.
Real example of Three black crows
Since there are a little more than one day left before the closing of the third candle in the combination, the candlestick combination (given in the idea) is a still forming pattern, where (i) each of the three black candles opened above the closing price of the previous one, that is, with a small upward gap, (ii ) further - by the end of the time frame the price decreases below the price at close of the previous time frame, (iii) volumes are increased relative to the last bullish time frame that preceded the appearance of the first of the “three crows”, (iv) the upper and lower wicks of all “black crows” are relatively short and comparable with the main body of the candle.
Historical examples of the Three Black Crows pattern
Here's an example what's happened early in April, 2024
And here's an example what's going on right now in August, 2024
Potentially it may appear again and again. Don't miss it out!
As history has repeated itself already, technical graph for S&P500 indicates on potential recovery, up to 5800 points, until November, 2024 (U.S. presidential elections).
