Definition
The Bearish Three Black Crows forecasts an upcoming inclining trend. It consists of three black candles forming a "stair". The daily opening prices are higher than the closing prices.
- Trend: Reversal
- Expected trend: Bearish
- Previous trend: Bullish
- Reliability: High
- Type: Bearish
- Number: 3
Recognition
- The market is in an upward trend.
- It consists of three black candles.
- The opening prices are in the trading range of the previous day.
- The daily closing prices are lower than the previous day’s closing price.
Interpretation
The Bearish Three Black Crows signals the end of the ascending trend. The opening prices of the long black candles are in the trading range of the previous day. The daily closing prices are lower than the previous day’s closing price.
Important factors
The opening prices on the second and third day are in the body of the previous day’s candle. The signal is more reliable if the opening prices are below the midline of the previous day’s candle. The market is oversold when the black candles are long. The formation is highly reliable, but requires a confirmation. The confirmation could come from a black candle with a downward gap or a lower closing price.
