The Three Black Crows Pattern
The Three Black Crows
The Three Black Crows pattern is the opposite of the Three Advancing White Soldiers pattern. The Three Black Crows pattern is a bearish reversal pattern that consists of three bearish candlesticks that are ominous and dark in color, hence the name. This is a moderate trend reversal pattern that should only come into consideration when it appears in a rally or an established uptrend. The Three Black Crows usually indicates a weakness in an established uptrend and the potential emergence of a down trend.
Each of the three candlesticks in the Three Black Crows pattern should be relatively long bearish candlesticks with each candlestick closing at or near the low price for the period. Each successive candlestick should mark a steady decline in price and should not have long lower shadows or wicks. Preferably, each of the three candlesticks should open within the real body of the preceding candlestick in the pattern but this is not essential. When this pattern appears in an uptrend, it indicates the potential weakening of the trend and a possible trend reversal. However, if the three candlesticks are over extended and make significant price declines, you may need to be wary of oversold conditions.
The Three Black Crows can be seen in the shaded area on the following 15-minute Euro/USD Forex chart. The Three Blck Crows were made from a double tops level at around 1.30249 that was made at 2:15 AM and at 11:00 AM on May 14, 2013.
3 Black Crows Pattern on a 15 Minute EUR/USD chart
The Hanging Man and Hammer candlestick patterns are related trend reversal patterns that may appear at the end of an uptend or downtrend respectively. This is a single candlestick pattern that with a short real body, little or no upper shadow and a long lower shadow that must be at least twice as long as length of the real body. The color of the candle is not import, only its location in the current trend.
The Hammer pattern is called a takuri in Japanese, which means testing the water for its depth. This is the bullish version of the pattern. A bearish ...
Bullish Harami Pattern
'Harami' is an old Japanese word that means pregnant and describes this pattern quite well. The harami pattern consists of two candlesticks with the first candlestick being the mother that completely encloses the second, smaller candlestick. It is a reversal candlestick pattern that can appear in either an uptrend or a downtrend. When the second candlestick is a doji, the pattern is called a harami cross and is more significant than the normal harami pattern as the doji's lack of a real body indicates great indecision and uncertainty.
When the harami pattern is ...
Belt Hold Lines
The Belt-Hold candlestick pattern is a minor trend reversal pattern. It is a single candlestick pattern that consists of a Marubozu candlestick that can be bullish or bearish. A bearish belt-hold line consists of a single dark candlestick that opens at or near its high and closes at or near its low, while a bullish belt-hold line consists of a single rising candlestick that also opens at or near its high and closes at or near its low.
The length of these candlesticks indicates the extent of its significance, which is further enhanced when it appears near market extremes as in an ...
The Evening Doji Star
Star patterns are trend reversal patterns that consist of three candlesticks, with the middle candles stick forming the star. A star is a candlestick with a short real body, like a doji or a spinning top, that gaps away from the real body of the preceding candlestick. There are three basic star patterns: the morning star, which appears in a downtrend; and the evening star and the shooting star, which appear in an uptrend.
The morning star and the evening star have a doji or a spinning top as the second candle...
Three White Soldiers
The Three Advancing White Soldiers pattern is so named because consists of three relatively long bullish (advancing) candlesticks, which are white or light in color. It is the opposite of the Three Black Crows pattern and is a bullish reversal pattern. The pattern consists of three candlesticks should all close on or near the high price for the period and should all be steady advances in price. This pattern appears in a downtrend where it indicates the emergence of market strength and a possible trend reversal.
However, a steady decline in ...
Reversal patterns mark the turning point of an existing trend and are good indicators for taking profit or reversing your position. Generally, trend reversal patterns indicate that a support level in a downtrend or a resistance level in an uptrend will hold and that the pre-existing trend will start to reverse. These patterns allow you to enter early in the establishment of the new trend and are usually result in very profitable trades.
The common reversal patterns include the double tops and double bottoms, triple tops and triple bottoms, broadening tops and broadening bottoms, ...