How to Trade Three Black Crows Candlestick Pattern

Information is not investment advice

Daily Forex Signals – In trading, we can rely on a bunch of different entry signals. While some can be calculated and defined with a strict mathematical formula, others are not that simple. You should be attentive to spot them and grab your reward. Three black crows pattern is one of these, so let’s break it down and see how it works and how to use it properly.

A Beginner’s Guide to Candlestick Trading

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What is the Three Black Crows Pattern?

As you know, the most popular chart type is Japanese candlesticks. They are easy to read, informative, and used by most traders to predict future market movements. At a certain point, traders came up with the idea of identifying candlestick patterns. They usually look like a series of candlesticks, after which the price moves in a particular direction. Three black crows is one of the patterns used by traders to seek reversal candlestick patterns on a chart. candlestick trading

Notice that traders say black candle when they mean a bearish one. Generally, most traders use red candles to visualize a bearish movement. On the contrary, a white candle usually means a bullish one, with most traders using green candles instead of a white ones. The name came from the past when candlestick charts were black and white.

Charting Basics – Bars vs. Candlesticks

Now, as we have finished with the pattern definition, let’s move to the pattern itself. Three black crows pattern looks like three consecutive bearish trading sessions. Usually, there are little or no wicks on the candles, meaning bears took complete control of the situation.

Hammer Candlestick Pattern

For example, the trading session after a bullish day started with a slight upside movement. Later that day, bears took control and pushed the price lower to the lower part of the previous day. The following two days were the same, pushing the price lower every time. By the end of the pattern, it usually looks as in the figure below. using forex signals

How to Trade Three Black Crows Candlestick Pattern

What Does a Three Black Crows Pattern Mean?

First, we need to explain how the market thinks it works and then how it actually works. The majority of traders suppose that Three black crows emerge close to the end of an uptrend and signal a potential reversal. The pattern should indicate that bears are in control of the price. Usually, trading tutorials teach people to seek buy entry after the pattern appears.

Charting Basics – Bars vs. Candlesticks

Indeed, some assets tend to follow this expectation and decrease after a series of red candles. For example, gold loves three black crows and usually moves lower after the pattern is finished. You can see it in the figure.

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