Of all the candlestick indicators, only a few are as strong as the black crows (also known as three black crows). This is a set of three (or more) consecutive black (downward-loving) candlesticks.

Why is it so strong? First, it is a 3-day consecutive downward-moving indicator. Second, each session opens within the real body of the previous session, and then closes lower.

The second day opens lower than the opening of the first; and the third day opens lower than the opening of the second. Each close is also lower. (With black candlesticks, the opening price is the top of the rectangle and the closing price is the bottom).

The pattern appears often and is not always perfect; but it is very easy to spot when reviewing a chart. So when this appears at the top of an uptrend, it strongly signals that the upward ride is over, and the most likely next step is a reversal to the downside. This happens about 4 out of 5 times, making it very reliable as a reversal. Even so, you still need to seek confirmation in the form of other candle indicators, traditional technical signs, volume, or momentum.

What about when this shows up during a downtrend? In that case, some analysts believe the black crows works as a continuation indicator. However, this belief may be flawed. Appearing in the wrong place might mean the pattern is merely a coincidence. But whenever you see this three-session move after an uptrend, it's a 4-out-of-5 chance that the next move is heading south.

A problem with the black crows is that by the time you see it, the move may be over. Not always, but often. As a sort of "mini-trend" of its own, black crows has great strength, but it's not easy to see it coming. So if you spot a black crows but the current signals do not confirm, you probably missed your chance. The best time to jump on this one (as long as you get bearish confirmation) is during the third session. If you have the first two, and you can spot the third developing in the same manner, you could still be able to cash it during that session itself. Then look for confirmation of more downward movement, or contradiction and signals of a bull trend to follow. It happens, so be ready to act according to what you see after the black crows.

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