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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Bulkowski's Two Crows

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Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 04/21/2017
20,548 -30.95 -0.2%
9,134 7.68 0.1%
706 4.81 0.7%
5,911 -6.26 -0.1%
2,349 -7.15 -0.3%
YTD
4.0%
1.0%
7.0%
9.8%
4.9%
Tom's Targets    Overview: 04/17/2017
20,100 or 21,150 by 05/01/2017
8,500 or 9,500 by 05/01/2017
725 or 685 by 05/01/2017
5,950 or 5,650 by 05/01/2017
2,275 or 2,425 by 05/01/2017
Mutt Winners: None YTD

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

Two Crows: Summary

The two crows candlestick acts as a bearish reversal but only about randomly. Thus, you cannot depend on this breaking out downward or upward, for that matter. The overall performance is on the far side of mid list, so the price trend after the breakout is just mediocre.

A look at the performance numbers shows that the best performance comes from patterns that obey the primary trend: upward breakouts in a bull market or downward ones in a bear market. Those "trade with the trend" setups look as if they will do well.

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

If you click on this link and then buy the book (or anything) at Amazon.com, the referral will help support this site. Thanks. -- Tom Bulkowski

 

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Two Crows: Important Results

Theoretical performance: Bearish reversal
Tested performance: Bearish reversal 54% of the time
Frequency rank: 64
Overall performance rank: 61
Best percentage meeting price target: 54% (bear market, down breakout)
Best average move in 10 days: -4.84% (bear market, down breakout)
Best 10-day performance rank: 26 (bull 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.

The ideal two crows candlestick
Two Crows
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Two Crows: Discussion

The two crows candlestick acts as a bearish reversal in theory as well as in reality, but testing shows that it acts that way only 54% of the time. I consider that "near random" because you will not be able to predict the breakout direction with any accuracy. The overall performance rank is 61, which is well down the performance list from 1 (best). With a frequency rank of 64, the two crows candlestick should be plentiful enough to find.

The best average move 10 days after the breakout is a drop of 4.84% after a downward breakout in a bear market. I consider moves higher than 6% to be good ones, so this candlestick falls well short of that. The best 10-day performance rank is 26 and that happens after an upward breakout in a bull market. That gauge is a comparison with other candle types, and the two crows does well.

Two Crows: Identification Guidelines

CharacteristicDiscussion
Number of candle linesThree.
Price trend leading to the patternUpward.
ConfigurationLook for a tall white candle in an upward price trend. Following that, a black candle has a body that gaps above the prior candle's body. The last day is another black candle, but this one opens within the prior candle's body and closes within the body of the first candle in the pattern.
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Two Crows: 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. Two crows candles that appear within a third of the yearly low perform best -- page 856.
  2. Select tall candles for the best performance -- page 856-857.
  3. Trade the two crows in an upward retrace of the primary down trend -- page 858.

Two Crows: Example

The two crows candlestick on the daily scale

The two crows candlestick appears circled in red on the daily scale. In an upward price trend, look for a tall white candle. Following that is a black candle with a body that gaps above the prior candle's body, like that shown. The last day is another black candlestick that opens within the body of the prior black body but closes within the body of the white candle.

In this example, the breakout from the two crows candlestick is upward because price first closes above the top of the candlestick pattern. Thus, this candle acts as a bullish continuation of the upward price trend.

An appealing setup for the two crows is to find the pattern when the primary trend is downward. The two crows appear as part of an upward retrace of the downward trend. Once price breaks out lower, the stock joins the existing trend and they head off toward zero together.

-- Thomas Bulkowski

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See Also

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. An error? Impossible My modem is error correcting.