Three Black Crows Candlestick Pattern | Examples & Trading

The Three Black Crows is a bearish reversal candlestick pattern made up of three consecutive red candles that close progressively lower. It forms after an uptrend or a strong bullish leg and signals that buyers are losing control while sellers are taking over. 

Each red candle opens within the previous one’s body and closes lower than the last, creating a staircase of consistent downward movement. This structure shows a clear shift in market sentiment and is often one of the earliest signs that a bullish trend might be ending. Traders use the Three Black Crows pattern to identify early reversal signals and prepare for short entries or as a signal to exit long positions. 

In our comprehensive guide at WR Trading, you’ll learn how to identify it on a chart, understand what drives it, and build practical trading strategies around it using confirmation tools and market structure. You’ll also see what makes it different from similar patterns and how to spot its strengths and weaknesses.

How Does a Three Black Crows Candlestick Pattern Form?

The Three Black Crows pattern forms after a bullish trend, extended rally, or strong upward leg in price and takes three candlesticks to complete. It starts with a large red candle that closes near its low, showing that sellers have stepped in forcefully. This is followed by a second red candle that opens within the body of the first and closes even lower. The third candle repeats this structure, again opening within the previous body and finishing near its low. Each red candle confirms that sellers are increasingly in control.

There are no exact time requirements, but the pattern should appear on larger timeframes like the 4-hour or daily chart for stronger reliability. The price action before the Three Black Crows should clearly reflect bullish movement, whether in the form of trending candles or a sharp upward swing. After the pattern finishes, many traders expect a deeper retracement, especially if the pattern forms near resistance or following overbought conditions.

What Does the Three Black Crows Candlestick Pattern Mean?

The Three Black Crows pattern represents a shift in control from buyers to sellers. When three consecutive red candles appear after an uptrend, it tells traders that bullish momentum is fading and that sellers are building strength across multiple candlesticks. 

The downward closing red candles show steady selling pressure, not just a single sharp rejection, which adds weight to the signal. For traders watching market psychology, it reflects a growing lack of confidence in higher prices and a buildup of bearish sentiment.

This pattern often signals the beginning of a larger pullback or full reversal. It gives traders an early opportunity to position for a trend change or tighten existing long positions before the decline accelerates. 

Where does the name of the Pattern Three Black Crows Come From?

The Three Black Crows candlestick pattern gets its name from the way it looks on a chart – three red candles lined up in a downward sequence, resembling a group of black crows flying lower together. In folklore, black crows are seen as signs of bad news, which fits the pattern’s bearish meaning.

How to Identify a Three Black Crows Candle in the Chart?

To spot the Three Black Crows pattern correctly, start by looking for a clear bullish trend or a strong upward move that sets up the right situation for it to form. Once that momentum begins to fade, the pattern forms with three red candles in a row, each one opening within the body of the candle before it and closing progressively lower.

The closes should be near the low of each candlestick, and the candles themselves should not have long lower wicks. This shows consistent selling strength with little pushback from buyers.

Furthermore, the Three Black Crows stands out more clearly when it forms near resistance levels or after overbought conditions. It becomes more meaningful if the third candle closes below a recent support line, confirming that bearish control is building. Clean chart structure, consistent candle sizing, and steady downward progression are the visual clues that help traders identify this pattern. It is not enough for three red candles to appear; the relationship between them and the trend that came before must also line up.

How to Trade the Three Black Crows Candlestick Pattern

The Three Black Crows pattern can be a high-quality bearish signal when used with proper context, confirmation, and structure. This guide walks you through a complete process to trade the pattern from finding it to applying technical indicators. 

1. Find the Right Three Black Crows Candlestick Pattern Setup
2. Wait for the Appearance of the Three Black Crows Candle
3. Open Your Trade – Entry Point 
4. Wait For A Confirmation Or Not
5. Choose Your Trading Take Profit 

Find the Right Three Black Crows Candlestick Pattern Setup

Start by scanning charts that are trending upward or showing signs of extended bullish movement. You are looking for the price to move into a resistance zone, psychological round number, or a prior swing high where the market has paused before. The best Three Black Crows tend to form when the move has been strong and persistent, with overbought readings on the Relative Strength Index or stochastic indicators.

To improve your results, apply a 50 or 100 period moving average to define the current trend. If the price is significantly above these averages and shows signs of slowing down, that context supports the appearance of a bearish reversal. Patterns that form after clean, impulsive upswings tend to carry more validity than those appearing in choppy, indecisive markets. Avoid setups that form in the middle of consolidation unless other tools confirm strong exhaustion.

Wait for the Appearance of the Three Black Crows Candle

Once you have found a likely reversal zone, monitor for the appearance of the Three Black Crows. You want to see three consecutive red candles, each opening within the body of the previous candle and closing lower than the last. Ideally, the closes are near the low of each candle, and none of them should show long lower wicks or signs of heavy buying support.

Volume can be a helpful confirmation here because a spike in volume during the second or third candle often signals that sellers are stepping in with conviction. This is true if the volume was decreasing during the prior uptrend and suddenly picks up during the pattern. A bearish MACD crossover or RSI drop below 50 can also support the signal. These tools help filter out false formations and provide extra confidence in the shift.

Open Your Trade – Entry Point 

Once the Three Black Crows is complete, place your short trade either at the open of the next candle or slightly below the third candle’s low. The aggressive entry gives a better risk-to-reward ratio but carries a higher chance of early volatility. A more conservative entry is just below the third candle, offering more confirmation at the cost of a slightly less favorable entry.

Set a stop-loss just above the high of the first candle in case the pattern invalidates, which keeps your risk contained to a logical boundary. The size of your stop should also reflect the recent volatility, for example, if the candles are large, consider adding a small buffer to avoid being wicked out prematurely.

Wait For A Confirmation Or Not

Some traders wait for an extra layer of confirmation before entering the Three Black Crows Pattern. This could be in the form of a follow-up red candle closing below the third crow, a break of a moving average, or a bearish crossover on the MACD. If you prefer this method, the trade becomes more reliable but often slightly less profitable.

Use confirmation if the market is choppy or near a strong support level. Skip it if momentum is already high and the pattern forms cleanly after an extended rally with high sell volume.

Choose Your Trading Take Profit 

Taking profits is as important as entering the trade because you don’t want to hold onto the position for an overextended period, as the market can swing back. Use recent swing lows, Fibonacci retracement levels, or round-number psychological zones to find potential price targets. The most common method is measuring the total height of the Three Black Crows and projecting that downward from the pattern’s low.

Another option is a fixed reward-to-risk ratio. Many traders aim for two times their stop size to ensure long-term profitability even with a 40 to 50 percent win rate. You can also trail your stop after each new low, locking in profit while letting the trend play out naturally. Choose what fits your strategy and risk tolerance.

Which Trading Strategies Are Suitable For The Dark Cloud Cover Pattern?

Traders who understand the structure and timing of the Three Black Crows can apply several proven strategies to trade it more effectively. The aim is to integrate it with broader analysis, such as support and resistance levels, momentum shifts, or trend structure, to filter out weak signals and reinforce strong ones. 

This section outlines three trading strategies for the Three Black Crows setup, with a focus on practical execution and logical structure. Each strategy can be used independently or as part of a larger trading plan.

1. Trendline Break Confirmation
2. RSI Bearish Divergence Setup
3. Moving Average Crossover with Pattern Confirmation
4. Bollinger Band Reversal from the Upper Band

1. Trendline Break Confirmation

Look for a Three Black Crows setup forming after a failed rally that hits a downward-sloping trendline. The candles should be moving away from the resistance in clean, consistent bars. Once the third candle closes near its low and breaks below a local support or neckline, that becomes your first confirmation. Draw your trendline clearly and wait until it has been respected multiple times before acting.

Once confirmed, enter your short position right after the pattern completes. Place a stop above the highest point of the pattern or just above the trendline to invalidate the setup cleanly. If the price starts to pull back to retest the trendline but fails again, it adds extra confirmation that the breakdown is valid. Your profit target can be placed at the next clear support zone or based on a measured move from the height of the prior swing.

2. RSI Bearish Divergence Setup

Pair the Three Black Crows pattern with a bearish RSI divergence for a stronger reversal signal. Scan the chart for higher highs in price followed by lower highs in RSI, showing momentum is weakening even though price action seems bullish. When the Three Black Crows form at the top of this divergence, it signals a shift in sentiment and increased probability of a breakdown.

Enter the trade after the third red candle closes, with RSI falling below 50 to confirm bearish control. Set your stop above the pattern’s high, ideally with some breathing room based on recent volatility. To manage risk, scale into the trade in smaller portions if you are unsure about timing. Your target should be the next swing low or previous area of price consolidation.

3. Moving Average Crossover with Pattern Confirmation

The moving average crossover with pattern confirmation strategy works best when the Three Black Crows form alongside a bearish crossover of key moving averages, such as the 20 and 50 period EMAs. If the pattern completes just as the shorter moving average crosses below the longer one, it confirms that momentum has shifted and sellers are now in control. Look for this confluence near a resistance zone or after a failed breakout.

Once you see both the crossover and pattern confirmation, enter short as soon as the next candle confirms continued weakness. Place a stop above the highest candle in the pattern or the recent swing high. Your profit target can be set based on the distance between the moving averages or projected to a lower key support area. Monitor for signs of exhaustion to lock in gains early if needed.

4. Bollinger Band Reversal from the Upper Band

When the Three Black Crows form right after the price has pushed outside or near the upper Bollinger Band, it can signal a sharp reversal. This is even more valid if the band expansion starts to narrow while the pattern completes. It tells you the bullish move is overextended and a mean reversion could follow. Look for the pattern appearing near the edge of the band during a parabolic move or volatile swing.

After the third candle closes and the price moves back inside the bands, enter the trade and use the midline of the Bollinger Bands as a short-term target. A stop can be placed above the pattern’s high or just outside the upper band, depending on your risk tolerance. This strategy works well in mean-reverting markets and when the price had previously rejected the upper range multiple times.

What Is The Success Rate Of The Three Black Crows Candlestick Pattern?

The Three Black Crows pattern is a high-reliability bearish reversal signal when it forms after a strong uptrend and appears at a resistance level. While exact percentages vary depending on the study and market, historical testing by Thomas Bulkowski in The Encyclopedia of Candlestick Charts shows that the pattern has a reversal success rate of roughly 78% in bull markets and around 72% in bear markets. 

However, it’s important to note that these results depend heavily on how strictly the pattern is defined and the timeframe in which it’s traded. Broader research across forex, stocks, and crypto shows that performance can fluctuate depending on the volatility and strength of the prior trend. The Three Black Crows become less dependable in sideways or choppy markets, and false signals are more frequent without confirmation.

What Are the Pros and Cons of Trading the Three Black Crows Candle Pattern?

Before using the Three Black Crows pattern in a real trading environment, it helps to weigh its pros against its cons. The structure is simple, but its effectiveness depends heavily on context, timing, and follow-through. Understanding both sides of the pattern makes it easier to avoid false confidence and build a strategy that adapts to changing conditions.

What Are The Advantages Of The Three Black Crows Pattern?

The Three Black Crows pattern stands out as one of the clearest bearish reversal signals in technical analysis. When it appears after a strong uptrend, it shows the moment sellers take control and buyers begin to lose momentum. These are the main advantages of using the pattern:

• Gives an early signal that the trend is weakening: The Three Black Crows form at the end of an aggressive bullish run, offering one of the first signals that buying strength is fading. Rather than reacting late to a moving average cross or other lagging tools, the Three Black Crows helps you prepare for a potential trend reversal before the breakdown gains momentum.
• The structure is clear and doesn’t rely on indicators: Three consecutive red candles, each closing lower than the last, is a simple but powerful visual. You do not need oscillators, trend lines, or overlays to spot it. This makes it highly effective when scanning multiple charts, and a reliable choice for traders who prefer to keep things clean and focused on price action.
• Works well when it forms near resistance: If the pattern appears near a prior swing high, a horizontal resistance line, or a psychological round number, it becomes significantly stronger. These areas already tend to attract sell orders, and the Three Black Crows adds further weight to the idea that sellers are stepping in.
• Confirmation is built into the structure itself: Unlike many reversal patterns that need a separate confirmation candle, this one has its confirmation built in. The third red candle provides follow-through and shows that bearish pressure is growing, reducing the need to wait for more signals before planning a trade.
• Adapts well across timeframes and markets: You can use this pattern on daily or 4h charts, in stocks, forex, or crypto. The structure remains the same across different instruments, making it a useful part of any strategy once you know what to look for and how to use it.

What Are The Disadvantages Of The Three Black Crows Pattern?

The Three Black Crows has many advantages, but there are negatives that you must know to avoid losses. It must be used properly, especially in relation to the broader market structure and key price zones. Below are some of the main drawbacks traders need to consider.

• It loses strength without an existing uptrend: The Three Black Crows only carries real weight when it appears after sustained upward movement. If the market is already moving sideways or stuck in a tight range, the three red candles may just reflect temporary selling pressure rather than a true shift in trend.
• You often enter after the price has already dropped: Because the pattern requires three red candles to complete, by the time it forms, the price may already be well below its high. This can lead to late entries with smaller reward potential and more distance between the entry and stop level.
• It does not offer a clear stop placement: The pattern itself does not create a well-defined low or structural point to place a stop-loss. Most traders will need to set stops based on resistance or recent swing highs, which can sometimes be far from the ideal entry depending on volatility and chart structure.
• It can fail without additional confirmation: While the pattern looks strong on its own, it is not a guarantee of continued downside. Without backing from momentum tools like RSI, MACD, or trend confirmation, it can result in false signals that quickly reverse.
• Short traps can occur during volatile conditions: If the Three Black Crows appear near a key news event or when the broader market is unstable, sharp reversals can happen even after the third candle closes. This risk is higher in assets known for fakeouts and squeezes, so a proper trade plan and risk management are still necessary.

Can the Three Black Crows Pattern Have Failure Signals?

Yes, the Three Black Crows pattern can have failure signals. Although it’s a strong bearish reversal setup, certain market conditions and technical factors can lead to false signals that trap traders or trigger premature entries. Below are some common failure signals:

• The pattern forms during a sideways market: If the Three Black Crows appear when the broader market is consolidating, the structure may not signal a true reversal. The price might drift sideways after forming the pattern rather than continuing lower, which misleads traders into thinking a bearish move is starting. Without a preceding uptrend or momentum, the setup loses its reliability.
• Weak close on the third candle: A strong Three Black Crows pattern ends with a long red candle closing near its low. If the third candle shows indecision or closes far above its low, it hints at hesitation. This shows that sellers may not be in full control, reducing confidence in the signal.
• The pattern forms right above strong support: Sometimes, a well-formed Three Black Crows can appear just before a major support zone. The price may bounce quickly after reaching this level, invalidating the bearish setup. Traders who short without doing the proper technical analysis may face sharp reversals.
• Volume does not confirm the selloff: Volume is key to confirming the strength of a reversal. If all three candles form with decreasing or low volume, it might be a sign of weak conviction. This can indicate the move is not widely supported and may fail to follow through.
• Momentum indicators show bullish divergence: If RSI or MACD show higher lows while the Three Black Crows form lower closes, there’s a divergence that contradicts the pattern. This signals that bearish momentum is fading even though the price appears to be falling. Such mismatches often precede sharp reversals upward.
• The candles overlap too much or show long wicks: Clean Three Black Crows candles should open within the prior candle’s body and close near the low, with minimal overlap or shadows. If you see large lower wicks or candles that hesitate, it reduces the clarity of the setup. This adds uncertainty and increases the chance of failure.

Which Indicators Can Be Combined With The Three Black Crows Pattern?

The Three Black Crows becomes far more reliable when it lines up with technical indicators that support the reversal. These tools help confirm that the shift from bullish to bearish momentum is not just visual but backed by actual pressure in the market. Here are the most effective indicators that work well with the Three Black Crows and how traders apply them in practice.

• Relative Strength Index (RSI): When the Three Black Crows appears at the top of an uptrend and RSI is already hovering above 70, that’s an early sign of exhaustion. If RSI then starts turning down as the second or third candle forms, it signals that the bulls are losing momentum. Traders look for this shift to add confidence before committing to a short position, especially if RSI drops below 50 shortly after the pattern completes.
• MACD (Moving Average Convergence Divergence): MACD is useful when it’s already flat or beginning to roll over before the first candle of the pattern forms. If a bearish crossover happens while the Three Black Crows is taking shape, it adds meaningful weight to the setup. Traders wait to see if the MACD histogram grows more negative after the third candle, which signals that the move could continue.
• Exponential Moving Averages (20 and 50 EMA): If the third candle of the Three Black Crows closes under a declining 20 EMA, that often confirms the short-term trend has shifted. Some traders use the 50 EMA as the broader trend filter. When the entire pattern forms below the 50 EMA or breaks below it right after, it often confirms that a deeper selloff could be underway. 
• Volume Analysis: Rising volume across all three candles is a strong confirmation that the selling pressure is supported by actual participation. A volume spike on the third candle shows urgency from sellers. On the other side, if the candles are forming with light or average volume, experienced traders often hold off or look for additional confirmation elsewhere.
• Stochastic Oscillator: This is often used to time short-term momentum shifts. If the Thee black Crows forms while Stochastic is crossing down from an overbought reading, that adds another layer of confluence. Some traders look for both lines on the oscillator to dip below the 80 level as the pattern completes, which can help catch the move before it accelerates.

What Are Similar Patterns to the Three Black Crows? 

The Three Black Crows is a powerful visual cue for a bearish reversal, but it’s not the only pattern that shows selling pressure or fading bullish momentum. Depending on the market context, other formations may offer earlier entry signals, different confirmation styles, or setups better suited to choppy or range-bound conditions. 

Some alternatives are faster to develop, while others give more flexibility in how they’re traded. Below is a breakdown of common alternatives that traders use in similar scenarios. These patterns may work as substitutes or be part of the confirmation process when validating a bearish outlook.

Pattern Name	Type of Pattern	Best Use Case	Key Characteristics / Conditions
Evening Star	3 Candle Bearish Reversal	Spotting a shift in sentiment after a strong bullish rally	A large green candle followed by a small-bodied candle, and then a large red candle that closes into the green one’s range
Bearish Engulfing	2 Candle Bearish Reversal	Confirming a short-term rejection after a bullish move	A red candle fully engulfs the previous green candle, showing an aggressive bearish takeover
Shooting Star	1 Candle Bearish Reversal	Identifying short-term exhaustion at highs	A single candle with a small body and long upper wick, closing near the low
Bearish Harami	2 Candle Bearish Reversal	Warning that bullish momentum is fading before a reversal	A small red candle fits inside the previous green candle’s real body, showing hesitation
Hanging Man	1 Candle Bearish Reversal	Catching exhaustion in uptrends before a potential reversal	A small real body at the top of a long lower wick that forms near the top of an upward swing

For all different candlestick pattern types, we created our ultimate candlestick patterns PDF for free, where you can learn the most popular formations.

What Is The Opposite Pattern Of The Three Black Crows?

The opposite of the Three Black Crows is the Three White Soldiers pattern. It represents a clear transition from bearish control to sustained buying pressure and is considered one of the strongest bullish reversal signals in candlestick analysis.

The Three White Soldiers form after a downtrend and features three strong green candles closing higher one after the other. Each candle opens within the previous body and finishes near its high, reflecting confident buying with minimal resistance. 

What is the Difference between the Three Black Crows Pattern and the Three White Soldiers Pattern?

The Three Black Crows and the Three White Soldiers look structurally similar but show completely different signals. One marks the end of buyer strength, the other the end of seller control. Understanding the contrast between them helps traders use each setup more effectively.

The Three Black Crows appears after an uptrend and signals that sellers are stepping in. It shows up as three red candles closing progressively lower, each opening within the previous candle’s body. This tells us that bullish momentum has gone, and sellers are gaining traction. 

In comparison, the Three White Soldiers forms at the bottom of a downtrend with three rising green candles, each closing higher and showing increasing buying pressure. Instead of weakness, it reflects a rebound in sentiment and the potential start of a bullish trend.

The context where these patterns appear matters just as much as the candles themselves. The Three Black Crows tends to work best near resistance, when the market has pushed too far and needs to correct. The Three White Soldiers works well near demand zones or when a strong selloff looks overextended. 

Section	Three Black Crows	Three White Soldiers
Construction	First candle: Strong red close after an uptrend. Second candle: opens within the first and closes lower. Third candle: opens within the second and closes lower again, continuing the decline.	First candle: strong green close after a downtrend. Second candle: opens within the first and closes higher. Third candle: opens within the second and closes even higher, continuing the upward move.
Forecast	Signals a shift to bearish sentiment and the start of a downside reversal.	Signals a shift to bullish sentiment and the start of a potential uptrend.
Type of Pattern	Three-candle bearish reversal.	Three-candle bullish reversal.
Trend Prior to Pattern	Forms at the top of an uptrend or after a strong bullish push.	Forms at the bottom of a downtrend or after a sharp decline.
Opposite Pattern	Three White Soldiers.	Three Black Crows.

What Are The Limitations Of The Three Black Crows?

The Three Black Crows pattern is a strong signal for a potential reversal, but it does not guarantee follow-through. Understanding these limitations can help traders avoid reacting too quickly or placing trades that lead to unnecessary losses.

• The pattern can form during normal pullbacks inside an overall bullish trend, leading to false reversals.
• Without confirmation from indicators or resistance zones, it can trap early short entries.
• It becomes less reliable when volume fades across the three candles, showing a lack of real selling strength.
• In volatile or sideways markets, it can appear often but fail to follow through with consistent downside movement.
• If the candles are too large, the risk becomes hard to manage because stops may need to be placed too far away.
•  When the third candle closes near strong support, a bounce may follow and limit the move’s potential.

Learn Pattern Trading With the WR Trading Mentoring

Identifying a pattern like the Three Black Crows is only one part of becoming a skilled trader. The real advantage comes from knowing how to apply it in different market conditions, combining it with confirmation tools, and building a complete strategy around it. That’s where structured guidance and focused feedback can make the difference.

At WR Trading, our mentoring helps traders take what they’ve learned and put it into real trading scenarios. Through detailed walkthroughs, chart reviews, and strategy reviews, you’ll learn how to build confidence around entries, manage risk with proper context, and avoid common mistakes. 

Instead of memorizing setups, you’ll develop the ability to read the market clearly and adjust based on real-time structure. If you’re serious about making pattern trading a consistent part of your trading plan, WR Trading mentorship gives you the tools and support to get there.

Conclusion: The Three Black Crows Candlestick Pattern Can Signal Powerful Reversals

To summarize, the Three Black Crows pattern gives traders a clear, structured way to spot early signs of bearish reversals after strong uptrends. Its formation reflects a shift in control from buyers to sellers, and when supported by broader market context, it becomes a high-value setup worth paying attention to.

We’ve broken down every aspect of the pattern, from how it forms, how to confirm it, where it works best, and how to build strategies around it using indicators. Now that you have the full picture, the next step is applying it. Test it across different timeframes, practice reading the conditions around it, and work it into your broader trading plan. 

FAQs: Most Asked Questions on Three Black Crows Pattern