๐ Understanding the โThree Black Crowsโ Pattern
What is it?
The Three Black Crows pattern is a bearish candlestick formation that signals a strong reversal from an uptrend to a downtrend. Itโs essentially the opposite of the Three White Soldiers and is a warning sign of heavy selling pressure.
How it forms:
Consists of three consecutive long-bodied bearish candles (usually red).
Each candle opens within or slightly below the previous candleโs body.
Each closes near its low, indicating strong seller dominance.
Why it matters:
This pattern tells traders that the bears have taken control, pushing prices lower for several sessions without major recoveries.
Trading tips:
1. Confirm with volume โ Higher selling volume makes the signal stronger.
2. Best after uptrend โ Works best as a reversal sign after a prolonged rise.
3. Stop-loss placement โ Above the high of the first candle to manage risk.
4. Look for confirmation โ Use momentum indicators (like RSI) to verify overbought conditions.
In short:
The โThree Black Crowsโ is a clear warning that the party may be over for bulls โ smart traders prepare for potential downside or shorting opportunities.
#priceaction #learntrading #tradingtips #tradingtechnique
