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 Blck Crows were made from a double tops level at around 1. 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. The Engulfing pattern is a reversal candlestick pattern that can appear at the end of an uptrend or at the end of a downtrend.
The first candlestick in this pattern is characterized by a small body and is followed by a larger candlestick whose body completely engulfs the previous candlestick's body. The colors of the candlesticks that make up the engulfing pattern are important. When the engulfing pattern appears at the end an uptrend, it is a bearish reversal signal and indicates a weakness in the uptrend and The dark-cloud cover pattern is the opposite of the piercing pattern and appears at the end of an uptrend.
It is a dual candlestick pattern with the first candlestick being light in color and having a large real body. The second candlestick must be dark in color, must open higher than the high of the first candlestick and must close down, well into the real body of the first candlestick. The deeper the second candlestick penetrates the first, the more reliable the pattern becomes. The dark-cloud cover pattern is also more reliable when it appear at or near a resistance line 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.
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. 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, Sunday, December 3, 1: Engulfing Pattern Bullish Engulfing.
Dark-Cloud Cover Dark-cloud Cover. Harami Pattern Bullish Harami Pattern.More...