Candles “Three Black Crows”
The Three Black Crows pattern is a set of three descending Japanese candlesticks.
This combination is a sign of a strong downtrend and price decline.
Interpretation of the model
The explanation of the model is that after an increasing trend, three black patterns appear; they open at or near the degree of completion of the previous day.
In reality, the model in its classical form is extremely rare, so some deviations from the rules are provided.
The form allows us to understand that this construction shows the start of extraordinary sales that have begun in the market.
Market participants close long positions, and the main trend changes its direction.
If the opening prices of each subsequent candle are lower than the previous one, then the signal increases.
Naturally, after this pattern appears, buying trades are recommended, as the emerging trend is expected to continue. It's even better to enter the market before the candles appear, but in this case, other signals should be used, and the candlestick pattern will only serve as confirmation of the correct entry.
There are rules for identifying the "Three Black Crows" candlestick:
Three black candles form, with closing prices exceeding the previous price;
the opening price of each candle is in the middle of the last candle;
the candles have short lower shadows.
This Forex candlestick pattern is sometimes referred to as "Three Identical Crows." When opening positions, be careful, as after the "Crows" appear, a correction of 20-30% of the total distance traveled by the trend during the candlestick pattern often occurs.
