Bearish Two Crows Candlestick Pattern

Two crows is a bearish market reversal pattern which indicates the end of an uptrend and the beginning of a downtrend. This is a three-day candlestick pattern which resembles dark cloud cover pattern and evening star pattern. Bearish two crows pattern includes a bullish (clear/white) of first day, and a small and long bearish (black/colored) candlestick on second and third day respectively.

The requirements of bearish two crows candlestick pattern includes

• The pattern should be formed at the top of a significant uptrend.
• First day should be a long bullish day.
• Second day should noticeable with a small bearish candlestick which opens above a significant gap from first candle.
• The real-body of second day candlestick should not completely fill the gap.
• Third day should be a bearish day where the candlestick opens with in the real-body of second candlestick and closes within the upper half of real-body of first day candlestick. (if this candlestick closes below the half of first day candlestick then the pattern is ‘evening star’)

Bearish two crows candlestick pattern occurs when bulls are unable to bring prices to new highs after the prices opens at a gap on second day. Bears dominate the second day but are unable to fill the gap formed. Third day bulls try one more time by getting a high opening but bears also dominate the day and are able to close the gap. Now the bulls loose their confidence and market becomes bearish.

Bearish two crows is a moderately reliable candlestick pattern. The reliability increases with increase in trading volume and with strength of prior uptrend. Confirmation of trend reversal is highly suggested which can be a bearish candlestick on forth day or a lower opening.

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