Question: What is the Candlestick pattern called "Three Black Crows"?
At the end of the uptrend, the presence of three consecutive long black candlesticks signifies the end of the upward move and the beginning of a new move in the opposite direction.
Each Marubozu opens above the previous close and concludes below it.
The lower shadows are very small if present – thus demonstrating the strength of the decline.
After a prolonged uptrend, traders enter the market aggressively with short positions, resulting in three consecutive long black candlesticks that close lower than each other.
Supply is clearly greater than demand and sentiment is negative – these factors drive the market to decline.
The forceful control of the bears leaves the bulls unable to react, other than closing their long positions.
Supply/Demand | Supply is greater than demand |
---|---|
Sentiment | Negative |
Direction | Bearish reversal |
Trigger | Consider selling if the next candlestick falls below the low of the third long black candle |