Three Black Crows

Three Black Crows is a three-candlestick bearish reversal pattern that forms at the top of an uptrend, consisting of three consecutive long-bodied red/black candles with progressively lower highs and lows, where each opens within the prior candle’s body and closes near its low, signaling strong seller takeover and potential downtrend initiation on NSE/BSE charts.​

What is Three Black Crows?

This visual pattern emerges after sustained advances: three successive bearish candles appear, each opening near the previous high but closing much lower, creating a “stair-step” decline that reflects mounting selling pressure. No specific calculations needed—purely structural, with long bodies (>average) and small shadows confirming bear dominance across daily or 4H timeframes.​

Opposite of Three White Soldiers (bullish), it thrives post-rallies in Nifty sectors like IT during 2025 peaks.​

Key Characteristics

Clear progression defines validity.​

• Three long red/black bodies in uptrend.​
• Each opens within prior body, closes lower than previous low.​
• Lower highs/lows forming, high volume ideal.​

Market Psychology

Bulls weaken as sellers infiltrate progressively: first candle tests highs, but closes weak; subsequent candles accelerate distribution, overwhelming bids and flipping sentiment bearish. This sustained pressure indicates institutional selling or profit-taking, priming corrections.​

In Uptrends (Reversal)

At rally peaks, it warns exhaustion; Nifty post-earnings showed 60-70% downside follow-through with volume. Reliability rises near RSI >70 or resistance.​

Confirmation and Reliability

~65% reversal rate; confirm via fourth red candle below pattern low or gap down. Add MACD bear cross, declining volume on highs.​

Trading Strategies

Short setups layer tools.​

• Enter below third candle low post-confirmation.​
• Filter: Uptrend top + overbought.​

Setup	Entry Trigger	Filters ​
Bearish Reversal	Close < pattern low	RSI >70, volume
Target	Prior swing low/1:2 R:R	Trail 20-EMA

Entry, Stop-Loss, Targets

Short on bearish close below pattern low, SL above first high (4-6% risk). Targets: pattern height down or support (15-30%); trail 20-EMA.​

Scale 50% at 1:1 R:R.​

Real-World Examples

Nifty Bank formed crows at 2025 highs, dropping 12%+; midcaps reversed 20% post-pattern.​

Advantages

Strong visual bearish shift with momentum.​

• Progressive confirmation.​
• High R:R potential.​

Limitations and Pitfalls

Ranges yield ~35% fakes; bull traps without volume. News overrides.​

Context + confirmation essential.​​

Conclusion

Three Black Crows signals bearish reversals via descending red trio at uptrend tops, powering shorts on NSE charts. Filters and confirmation unlock edges, capturing downturns profitably. Systematic spotting builds reversal mastery.