Three Black crows(RED)Candle

Three black crows is a term used by stock market analyists to describe a market downturn. It appears on a candlestick chart in the financial markets. It unfolds
across three trading sessions, and consists of three long candlesticks that trend downward like a staircase. Each candle should open below the previous day's open, ideally in the middle price range of that previous day. Each candlestick should also close progressively downward to establish a new near-term low. The
pattern indicates a strong price reversal from a bull market to a bear market. 

[1] The three black crows help to confirm that a bull market has ended and market sentiment has turned negative. In Japanese Candlestick Charting Techniques, technical analyst Steve Nison says "The three black crows would likely be useful for longer-term traders.

 [2] This candlestick pattern has a counterpart known as the Three white soldiers, whose attributes help identify a bullish reversal or market upswing.

The three black crows candle formation does not happen very frequently in stock trading, but when it does occur swing traders should be very alert to the crow's caw. The candlestick's metaphor is three crows sitting in a tall three. On the day the first black crow makes its appearance, the formation is most predictive if the first "crow" -- or dark candlestick -- closes below the previous candle's real body.

Two more long-bodied consecutive down days then ensue. On each of these days, it appears as if the stock wants to regain its former strength, as the stock opens higher than the close on the previous day. By the end of each session, however, the sellers regain control and the stock drops to a new closing low. Here is what three black crows candlestick pattern looks like:

Let's See In a Chart

Pattern Psychology 

Note that the lower shadows on three black crows are small, or in some cases even nonexistent. Although three black crows is a complete pattern in and of itself, traders should always be alert to what happens on the fourth day after the
pattern is formed. Since there has been intense selling throughout the pattern, the stock may be overextended to the downside. However, if the stock continues its negative pattern on the fourth day, then it is likely that the issue is going much lower. 



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