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To evaluate the performance of the pattern in your stock exchange within the context of other global markets, please refer to the table below. Locate your stock market to see its ranking among others. This will provide insights into the pattern’s strength and reliability, aiding you in your buying and selling decisions.
BEARISH THREE BLACK CROWS
Definition
This pattern indicates a strong market reversal. It is characterized by three normal or long candlesticks that progressively decrease in value. Each day opens slightly higher than the previous day’s close, but prices progressively close at lower levels. This staircase-like behavior signals a trend reversal.
Recognition Criteria
1. The market is currently characterized by a strong upward trend.
2. Three consecutive normal or long black candlesticks are observed.
3. Each candlestick opens within the body of the previous day.
4. Candlesticks progressively close at new lows, below the preceding day.
Pattern Requirements and Flexibility
The Three Black Crows consists of three consecutive normal or long black candlesticks. The last two candlesticks must open within the range of the preceding candlestick and close lower.
Trader’s Behavior
This pattern emerges when the market has remained at a high price level for an extended period. The market is still in an uptrend and is now approaching a peak or has already reached the top. Subsequently, a decisive downward movement occurs, represented by the first black candlestick. The decline in prices continues over the next two days, characterized by progressively lower closes. As a result, bulls are compelled to take profits.
Sell/Stop-Loss Levels
The confirmation level is determined by the last close. For confirmation, prices should fall below this level.
The stop-loss level is defined as the last high. If, following the bearish signal, prices rise instead of falling and either close or make two consecutive daily highs above the stop-loss level, without detecting any bullish pattern, the stop-loss is triggered.