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Abandoned Baby
Advance Block
Belt Hold
Breakaway
Dark Cloud Cover
Deliberation
Doji Star
Dragonfly Doji
Downside Gap Three Methods
Downside Tasuki Gap
Engulfing
Evening Doji Star
Evening Star
Falling Three Methods
Gravestone Doji
Hanging Man
Harami
Harami Cross
Identical Three Crows
In Neck
Kicking
Meeting Lines
On Neck
Separating Lines
Shooting Star
Side By Side White Lines
Three Black Crows
Three Inside Down
Three Line Strike
Three Outside Down
Thrusting
Tri Star
Two Crows
Upside Gap Two Crows

Three Black Crows
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Pattern: reversal
Reliability: high

Identification
Three long black days occur with each successive open being within the body of the previous day and each successive close being below the previous day's and near the day's low.

The Psychology
In an uptrend or within a bounce of a downtrend, the three long black candles speak for themselves. If volume accompanies the move, the reliability of the pattern increases significantly.

The bearish Three Black Crows is similar to the bearish Identical Three Crows, bullish Concealing Baby Swallow, bullish Ladder Bottom and bullish Three Stars in the South and could be the beginning of the bearish Three Line Strike.



Three Black Crows is a solid reversal pattern whose only flaw is the fact that it takes three down days to form, so going short after its formation may be chasing the stock. You can see above SUNW dropped 8 points (about 12%) before the pattern was completed. Exiting a long at that time was a little late to enter a short carried higher risk.



BMC presented a more favorable way to play a bearish Three Black Crows formation. The third candle also broke support. That's a nice one-two combination and because the prudent trader will often wait until support it taken out, you don't feel like you are chasing the play.



After gapping down, CKFR made a valiant attempt at filling the gap, but that attempt ended with a bearish Three Black Crows formation. Notice the previous low held, so that's here you take profits.



Here's an example of a bearish Three Black Crows pattern that failed miserably...and it formed at resistance (40). They don't always work!!


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