The interface of the stock market is a little tricky to understand if you do not have prior knowledge. So, if you have ever seen a stock market chart, you have noticed a candlestick setup. So, this red and green candlestick pattern depicts a lot of profits and losses in the stock market. These candlesticks form different types of patterns which depict a specified situation. One of these common patterns is the three black crow patterns.  

What Is Meant By Three Black Crow Patterns? 

The pattern is three black crows denoted by three red candles as a consequence. When three red candlesticks are pointing downward, the company is losing shares. Each closing of the candle is the opening of the one indicating a downward trend kicking in. It is also known as a bearish candlestick setup.

The pattern creates immediate selling pressure on the owner of the shares. In most cases, shareholders sell their stock when they notice three black crow patterns, and others experienced in the stock market compare the pattern with other charts before selling it. So, if you also want to be a master of the stock market, then join our stock market courses in  Ludhiana and decide where to sell and where not to. Guidance from experts can train you in dealing with patterns like three black crows. 

Spotting these three red candles is not much of a hustling task. Let’s understand with a demonstration here: 

Wherever you spot three red candles, you must first notice the price. Suppose the first candle’s open price is higher than the closing price. If the opening price of the second candle is lower than the first, then the closing is much lower. On the third day, again analyze the candle to see if the pattern remains the same: lower opening and lowest closing price; then, it indicates the formation of three black crows.  When traders encounter these down-trending patterns, they must be ready for a hefty loss. 

How Can You Manage Or Trade With Three Black Crow Patterns? 

Here, while managing these down-trending patterns, your decision-making skills are tested. One can easily trade with black crow patterns by using demand and supply zones or by deciding entry and exit. In four simple steps, you can deal with three black crow patterns; these points are listed below: 

• Spot And Analyze The Pattern 

Watch your trading chart, spot three black crow patterns, and see the closing and opening prices. If the opening price of the second candle is lower than the closing price of the candle above, it is a sign that prices are dropping steadily. 

• Wait Until Lowest Price Drop 

After you see the three black crows, you will see a significant price drop. So, at this point, you can consider entering a short trade; if you also want to learn these tips, join our stock market courses in  Ludhiana and become a master of the stock market. 

• How To Decide Entry Point  

If you see pricing constantly dropping, you can enter to break through. It is a sign that the downward trend is still strong. By entering at this point, you can catch the next leg down and earn some profit. 

• Exit Before Demand Zone 

Exiting a trade just before a demand zone is beneficial as, at that point, prices are higher all the time. There is a chance that the price may bounce back, and you can lock profits before it’s gone.  

Conclusion  You can consider the three black crows a useful sign indicating a constant price drop. This bearish pattern of strong red candlesticks is not always reliable. To learn more management tips in our stock market courses in Ludhiana and gain knowledge about trends in the stock market. Learning to trade with a downtrend pattern and training from experience will help you make more informed decisions about trading. You can learn ample ways to enter and exit in short trade with the assistance of our experienced stock market trainers.