Two Crows candlestick pattern

The Two Crows is a three-line candlestick pattern consisting of 2 red candlesticks with the same small shadow on both sides following the 1 green candlestick with a small shadow on both sides. In most of the cases it represents a bearish reversal pattern.

The confirmation process for this pattern involves the breaking of a trend line or the next support area formed by the first candlestick line. If the pattern is not confirmed, it can serve as a temporary pause in an uptrend or bullish direction.

This pattern is similar to the Evening Star pattern, the difference is in the second candlestick: the Evening Star has a short green candlestick in the middle, emphasizing indecision, while the Two Crows has a smaller bearish candlestick (smaller than its first green candlestick), reflecting a potential loss of momentum.

Construction

1st

• candlestick in uptrend
• normal green body with little shadow on both sides

2nd

• red body smaller than first green candlestick (not doji candlestick)
• bearish candlestick
• opens with gap up from 1st candlestick and moves upwards until reversal
• close price below or at prior closing
• closes lower than its price high, but still higher than previous price close of first candlestick (gap between bodies)^①

3rd

• relatively longer red body to 2nd candlestick
• opening price within second candlestick body^②
• closing price is lower than closing price of 2nd candlestick and within body of first green candlestick (gap close)^③

The 3rd candlestick continues the bearish sentiment and suggests a possible reversal of the short-term uptrend.

Check the day's economic calendar for any macro data and combine it with in-depth fundamental analysis.

Stop loss order can be placed slightly above the top of the candlestick pattern’s high (not a trading advice).