As of 12/20/2024   Indus: 42,840 +498.02 +1.2%     Trans: 15,892 +32.54 +0.2%     Utils: 986 +14.76 +1.5%     Nasdaq: 19,573 +199.83 +1.0%     S&P 500: 5,931 +63.77 +1.1%	YTD  +13.7%   0.0%    +11.9%    +30.4%    +24.3%	Targets    Overview: 12/12/2024     44,200 or 41,750 by 01/01/2025   16,100 or 17,700 by 01/01/2025   1,050 or 975 by 01/01/2025   20,500 or 19,300 by 01/01/2025   6,100 or 5,775 by 01/01/2025
Chart Pattern Indicator: on 12/5/24

As of 12/20/2024   Indus: 42,840 +498.02 +1.2%     Trans: 15,892 +32.54 +0.2%     Utils: 986 +14.76 +1.5%     Nasdaq: 19,573 +199.83 +1.0%     S&P 500: 5,931 +63.77 +1.1%	YTD  +13.7%   0.0%    +11.9%    +30.4%    +24.3%
Targets    Overview: 12/12/2024     44,200 or 41,750 by 01/01/2025   16,100 or 17,700 by 01/01/2025   1,050 or 975 by 01/01/2025   20,500 or 19,300 by 01/01/2025   6,100 or 5,775 by 01/01/2025
Chart Pattern Indicator: on 12/5/24

Bulkowski on the Three Black Crows Candle Pattern

Three Black Crows Candlestick: Summary

The three black crows candlestick is a pattern with definite identification rules or guidelines. Not any three black candles in a downward price trend will qualify. The pattern acts as a bearish reversal of the upward price trend and the overall performance is outstanding.

A check of the performance over 10 days shows some startling results: Do not trade this if the breakout is downward. Only upward breakouts are worth considering. If you remove the 10 day restriction, then the worst performance comes from three black crows in a bull market, regardless of the breakout direction.

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My book, Encyclopedia of Candlestick Charts, pictured on the left, takes an in-depth look at candlesticks, including performance statistics.

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Three Black Crows Candlestick: Important Results

Theoretical performance: Bearish reversal Tested performance: Bearish reversal 78% of the time Frequency rank: 60 Overall performance rank: 3 Best percentage meeting price target: 36% (bear market, up breakout) Best average move in 10 days: 13.31% (bear market, up breakout) Best 10-day performance rank: 2 (bear market, up breakout) All ranks are out of 103 candlestick patterns with the top performer ranking 1. "Best" means the highest rated of the four combinations of bull/bear market, up/down breakouts. The above numbers are based on hundreds of perfect trades. See the glossary for definitions.

Three Black Crows

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Three Black Crows Candlestick: Discussion

The three black crows candlestick acts as a bearish reversal 78% of the time. The reason for such a high number is that a close below the bottom of the candle pattern will mark it as a bearish reversal, but price has to climb and close above the top of it to score it as a bullish continuation. With price ending near the candle's low, it is much easier for a downward breakout than an upward one to occur.

The overall performance rank is 3 and that is due, in part, to the large moves price makes after an upward breakout. In a bear market, for example, the best average move 10 days after the breakout is a rise of 13.31%. I consider 6% as a good move, so the three black crows double that. However, the result is based on just 66 samples. In fact, instead of the 20,000 candle patterns that I like to see, I found only 2,660 out of over 4.7 million candle lines.

Three Black Crows Candlestick: Identification Guidelines

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Three Black Crows Candlestick: Three Trading Tidbits

If you want a few bones from my Encyclopedia of candlestick charts book, here are three to chew on. The pages refer to the book where the tips appear.

1. Three black crows candles that appear within a third of the yearly low tend to act as reversals most often -- page 734.
2. Select tall candles for the best performance -- page 732-73.
3. Look for an upward breakout from the three black crows -- page 734.

Three Black Crows Candlestick: Example

The chart shows three black crows circled in red on the daily scale. Price trends upward leading to the start of the candlestick pattern then three tall black candles appears. The last two candles should open within the body of the prior candle, but that is difficult to see on this chart. Price should close at or near the low of each black candle and each one should post a lower low, which they do.

Since this candlestick has no breakout yet, I cannot say if this three black crows pattern is a continuation or a reversal. I will say that one setup that works is to find a three black crows with an upward breakout in an upward price trend.

By that I mean price should be moving higher in a primary trend (longer term), form a three black crows pattern, and then have price close above the top of the candlestick. Since price is resuming the climb along with the longer term trend, it is the ideal situation, and it is more likely to end in a profit.

-- Thomas Bulkowski

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See Also

• Could your candle pattern be identical three crows?
• Or how about a bearish three-line strike?
• A ladder bottom is an extension of three black crows.
• Tall candles show support and resistance.
• Two candlestick tips could improve profitability.
• Candles near the yearly low perform best.
• Chart pattern breakouts: Which candlesticks appear most often the day before breakouts?
• Shadows. Do tall candle shadows predict price turns? Yes and no.
• Tall candles at peaks and valleys. Tall candles appear at turning points.

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