Description
The Three Identical Crows pattern has the same criteria as the Three Black Crows pattern. The difference is that the opens are at the previous day’s close. The three identical crows is one of the secondary candlestick patterns. The secondary signals are titled as such because they do not appear as frequently as the 12 major signals. That does not negate the effectiveness of these signals for identifying reversals. Be aware of the implications of these signals and it will provide you with additional opportunities during the course of your investment decisions.
Criteria for Three Identical Crows
- Three long black or red bodies occur and all are either close to or equal in length
- The prior trend should have been up.
- Each day opens at the close of the previous day.
- Each day closes near its low.
Pattern Psychology
After an uptrend is in effect a long black or red candle forms, however the selling is more severe. There does not appear to be any buyers at the following day’s open. There are three long black or red candles that have a stair-stepping pattern to them and this indicates a much greater motivation to get out of the position.
The investment psychology incorporated into candlestick signals makes it easier to understand what is going on in an investor’s mind. The signals were created through hundreds of years of visual analysis and interpretation by successful Japanese Rice traders.
Throughout his investment career, Stephen Bigalow has directed his investment acumen towards developing improved methods for extracting profits from the investment markets. His research, encompassing all fundamental and technical methods, resulted in verifying that Candlestick analysis was superior to any other method.
One of the biggest misconceptions of investors is that prices move based upon fundamental reasons when in fact prices move based upon the “perception” of fundamental reasons. The Japanese Rice traders discovered this many centuries ago. Why do prices go down when good news is announced? The answer is that the anticipation of that good news was already built into the stock price.
Japanese Candlestick trading signals consist of approximately 40 reversal and continuation patterns. All candlestick patterns have credible probabilities of indicating correct future direction of a price move.
Please continue to learn how to identify each different candlestick trading pattern as well as what that pattern indicates is occurring in the markets.
