As of 11/20/2024
Indus: 43,408 +139.53 +0.3%
Trans: 17,002 -26.31 -0.2%
Utils: 1,055 +1.25 +0.1%
Nasdaq: 18,966 -21.33 -0.1%
S&P 500: 5,917 +0.13 +0.0%
|
YTD
+15.2%
+6.9%
+19.7%
+26.3%
+24.1%
|
 46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,075 or 1,000 by 12/01/202420,000 or 18,400 by 12/01/20246,100 or 5,800 by 12/01/2024 |
As of 11/20/2024
Indus: 43,408 +139.53 +0.3%
Trans: 17,002 -26.31 -0.2%
Utils: 1,055 +1.25 +0.1%
Nasdaq: 18,966 -21.33 -0.1%
S&P 500: 5,917 +0.13 +0.0%
|
YTD
+15.2%
+6.9%
+19.7%
+26.3%
+24.1%
| |
|
46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,075 or 1,000 by 12/01/202420,000 or 18,400 by 12/01/20246,100 or 5,800 by 12/01/2024 | ||
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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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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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.
| Characteristic | Discussion |
| Number of candle lines | Three. |
| Price trend leading to the pattern | Upward. |
| Configuration | Look for three tall black candles that appear in an upward price trend. Candles 2 and 3 of the pattern should open within the body of the prior candle, and all three should close near their lows, making new lows along the way. |
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.
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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