Three Black Crows Pattern

The three black crows pattern in a technical analysis trading chart is a recognised pattern to identify a bullish reversal. Typically, this pattern appears after a sustained upward movement of asset prices and when sellers or bears start taking over and force the prices down.

The Indian stock market has seen a surge from 4.2 crores in 2020 to 13 crores in 2025, indicating an increasing market participation.

If you are one of them, to increase your profit potential, learn this pattern.

A Detailed Definition of the Three Black Crows Pattern

A 3 black crows pattern typically appears after a strong uptrend, and if you closely monitor a chart, you will see 3 consecutive bearish candles appearing next to the uptrend.

These 3 candles usually appear near the high of the previous candlestick’s high. They close near the low of the earlier stick.

Thus, it indicates that there is a consistent selling pressure in the market and a potential shift from a bullish sentiment to a bearish one might be near.

For example, suppose a stock you are observing rallies up and closes at INR 520. It then forms three long bearish candles, closing at INR 505, INR 490, and INR 475. Here, each of them opens near the previous close and ends near the day’s low.

Typical Formation of the Three Black Crows Pattern

Adding the formation of the three black crows pattern to your knowledge and strategy might increase your trading capability, and here is a detailed view:

You can locate it by reading its length and colours as primary identifiers. These appear in either red or black colour and are typically longer. In terms of formation, each candle creates a pattern that looks like a downward staircase.

Here, the first candlestick appears as a part of the established uptrend. Initially, it opens close to the high of the earlier session, but as sellers start taking over, the price gets pushed down. Thus, it ultimately indicates a bearish momentum.

Similarly, the second candle indicates a potential uptrend of the previous uptrend, but again, the sellers start dominating. It drives the prices lower, making it a bearish indicator with little to no lower or upper shadows.

The 3rd candle opens near the high of the earlier day’s close. As buying pressure fades away, the prices get lower, making it a bearish candle with minimal shadows.

How to Analyse and Trade with the Three Black Crows Pattern?

Typically, only up to 20% of day traders might make profits in the stock market, and that too with careful analysis of market conditions, patterns and other factors. Thus, you must also learn the strategy specifically as follows:

1. Pattern Confirmation

   After a strong uptrend in an asset’s prices, you must ensure that the candles of the 3 black crows pattern meet its formation criteria. Ensure that 3 of the candles of a three black crows pattern have minimal to no shadows. Once you spot it, you must confirm it with indicators such as an RSI, trade volume analysis, MACD or any other bearish confirmation tool.

2. Entry Point

   After you have identified the pattern, you must find an entry point to assess potential profitability. Here, you must enter a short position and can open it either at the close of its 3rd candlestick or on the next pullback if prices retrace higher.

3. Stop-Loss Placement

   You must place a stop-loss to limit your potential losses on investments. It might be wise to place a stop-loss slightly beyond the high of the 3rd candlestick of a three black crows pattern. Say the third candle has a high of INR 482, you can place your stop-loss slightly above it, at INR 485, to protect against a potential upward reversal.

4. Profit taking

   Try to take a potential profit at the subsequent major support level once the price reaches your target price. At this point, you may close your short position.

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Three Black Crows Pattern vs. Three White Soldiers: A Quick Comparison

While trading, you might confuse the 3 black crows pattern with the 3 white soldiers, as they share similarities in terms of their structures. Here is how you clearly identify these two:

Limitations of the Three Black Crows Candlestick Pattern

Although a 3 black crows candlestick pattern has the potential of forecasting a bearish reversal, here are some of its drawbacks you must be careful about:

1. Risk of False Signals

   Similar to other patterns, a 3 black crows pattern might produce false signals. Thus, you might face situations where it appears, but it fails to predict a market reversal accurately, and the market moves in a different direction.

2. Dependent on Market Condition

   This pattern is typically effective when a bullish sentiment sustains for some time, but as it ends, this pattern might appear. However, in a sloppy or sideways market, the prediction of this pattern might not be that reliable.

Conclusion

A three black crows pattern in a trading chart usually appears after a strong price uptrend. It indicates a potential downtrend, and as a trade, you must confirm with trading volume, RSI and other indicators.

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FAQs on the Three Black Crows Pattern

1. What does the three black crows pattern mean?

When this pattern appears on the chart, it means that the uptrend might be near its end. It indicates a further downfall of asset prices.

2. What is the success rate of the three black crows pattern?

Based on market research, this indicator has a success rate of around 70%. However, it is always wise to confirm a reversal using other bearish confirmation tools.

3. What is the story of the three black crows pattern?

It appears after a sustained uptrend and is formed as 3 consecutive bearish candles, indicating a downtrend.

4. What is three inside up three inside down?

A three inside up typically indicates a reversal from bearish to bullish. Conversely, a three inside down represents a potential reversal from bullish to bearish.