Three Black Crows Candlestick Pattern
The three black crows candlestick pattern is composed of three large bodied candlesticks all closing lower and with relatively small upper and lower shadows.
Three Black Crows Candlestick Pattern Analysis
The three black crows candlestick pattern represents a possible reversal to the downside. Similar to other reversal patterns, the three black crows candlestick pattern is most significant when it is preceded by an established trend - in this case, an up trend.
The three black crows candlestick pattern becomes increasingly relevant when the following occur:
- All three candles contain large bodies with closing values lower for each time period. The upper and lower shadows are absent or relatively small.
- It is preceded by a strong up trend.
- Overbought indicators confirm a change in market direction.
Forex Trading Ideas
The three black crows candlestick pattern may be traded alone, or with a combination of signals and/or indicators. For example:
- Step 1 – Wait for a three black crows candlestick pattern to appear during an established up trend.
- Step 2 – Confirm oversold conditions using the Relative Strength Index Indicator.*
- Once conditions 1 – 2 are met place an entry order.
*Additional confirmation ideas – confirm the three black crows candlestick pattern when it appears outside of the Bollinger Band or when the Stochastic Oscillator signals an overbought condition.
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