Upside Gap Two Crows Candlestick Pattern: Rules, Trading and Test Results

The upside gap two crows candlestick pattern is a three-candle bearish reversal pattern that forms in an uptrend: a long bullish candle, a bearish candle that opens with a gap above it, then a larger bearish candle that opens above the second, engulfs it and falls back, but still closes above the close of the first candle. The window stays open, yet two sessions in a row have ended below their open.

This guide explains how to identify the upside gap two crows pattern, the market psychology behind it, how it differs from other bearish candlestick patterns, how to use it in trading, and what actually happened after it. Our test bench scanned full market history on stocks, ETFs, indices, commodities, crypto and forex. It found 34 occurrences on daily charts, almost all on US stocks (crypto and forex, which rarely gap, produced none), and compared the outcome with random bars on the same assets.

What is the upside gap two crows candlestick pattern?

The upside gap two crows is a rare bearish reversal candlestick pattern of three candles. The "upside gap" is the space between the first two real bodies. The "two crows" are the two bearish candles that sit above the first one like crows on a branch, a traditional bad omen in Japanese charting. In technical analysis, it belongs to the family of crow patterns, with the two crows, the three black crows and the identical three crows.

Steve Nison, who introduced Japanese candlestick charting to traders in the United States and Europe in Japanese Candlestick Charting Techniques (1991), describes this candlestick pattern as a sign of a top. The open-source TA-Lib library codes it as CDLUPSIDEGAP2CROWS with the same construction, and on candle shape alone, at TA-Lib's own long-body threshold, our rule finds all the cases it flags.

Our test bench uses the same rule, written so a computer can apply it without judgment: after an uptrend (the close before the pattern is at least one average true range above the close 10 bars earlier, in the upper half of the last 40 closes), a long white candle; a black candle whose body gaps above it; a larger black candle engulfing the second body but still closing above the first close. Body size is measured against the 10 prior candles, as in TA-Lib, with a stricter threshold for a long body.

Visual representation of the pattern

The chart below is not drawn by hand. It is the median shape of the clean occurrences our bench found on daily charts across all markets, with the faded candles showing the rise before the pattern, and the lines of the position we test: an entry order below the low of the pattern, a stop loss above its high, a target at twice the risk.

How to identify the upside gap two crows pattern

Check these points in order. All of them must be true.

The first candle: a long bullish candle

Prices are in a rising trend, and the first candle extends it with a big real body that closes near its top. On its own it is the normal look of a strong rise, with buyers in control.

The second candle: the upward gap

The second candle opens with a gap above the prior close, which classical analysis reads as optimism, but sellers push it down from the open. It ends as a bearish candle whose whole body stays above the first one: the upside gap is still open at the closing bell.

The third candle: the bearish reversal

The third candle starts above the open of the previous one, then falls and closes below its close, covering the second body. That close still stays above the first one, so the gap is not filled. Wait for the end of this third session: before it, the pattern does not exist.

Market psychology: what the pattern tells traders

The pattern tells a story of three sessions. The first session confirms the trend. The gap up the next morning shows that buyers are still eager, but the bearish session shows they could not hold the opening price. On the third session, the open jumps even higher, another attempt by the bulls, and sells off again to end below the previous close. Two failed gaps in two sessions are read as a warning: the buying pressure that drove the rise is fading.

That reading is plausible, but the bears have not done much damage yet: the price is still above the first close. On our daily data, the median formation covered 4.98% of price from top to bottom, or 2.17 times the average true range (ATR). Whether the selling continues is a question for data, not for the story, and this is where technical analysis needs testing.

How the upside gap two crows differs from other patterns

Upside gap two crows vs. two crows

The first two candles are the same. In the two crows, the third candle starts inside the middle body and ends inside the first one: the gap is filled. In the upside gap two crows pattern, the third candle starts above the second, engulfs it and ends above the first close: the gap stays open. In our daily tests, the two crows reached its 2:1 target in 27.1% of trades against 23.3% on random dates, with an expectancy of −0.16 R before costs.

Upside gap two crows vs. three black crows

The three black crows is three big bearish sessions after a rise, each starting inside the previous body and ending below it, with no gap. It shows three sessions of steady selling, while the upside gap two crows shows two failed gaps above a bullish candle. In our daily tests, the three black crows reached its target in 22.1% of trades against 26.0% on random dates (expectancy −0.22 R).

Upside gap two crows vs. evening star

The evening star also starts with a big rising session and a gap up, but its middle session is short and of either color and the third candle ends at least 30% into the first body. It needs a deeper decline than the upside gap two crows formation. On the daily chart, the evening star reached its target in 26.6% of trades against 25.8% at random (expectancy −0.16 R).

Upside gap two crows vs. dark cloud cover

The dark cloud cover does it in two candles: a bullish candle, then a bearish candle that opens above the prior top and ends below the middle of the first one. On the daily chart, it reached the target in 26.4% of trades against 27.7% at random (expectancy −0.21 R).

Trading strategy: how to execute the pattern

The classic trading strategy sells a break below the low of the pattern, places a stop above its high and aims for a target set as a multiple of the risk. This is the position our bench simulates on every occurrence.

Identifying the entry point

The aggressive entry sells at the close of the third candle. The conservative one waits for confirmation: a sell stop just below the low of the pattern, which is the low of the first session unless a later candle trades lower. That level is far, because the pattern sits well above the first open. In our daily tests, the entry order was triggered only 35.3% of the time; in 64.7% of cases, price rose above the high of the pattern first and the setup was canceled before entry. Confirmation cancels most setups: most occurrences never become a position.

Setting stop loss and risk management

Using volume to confirm the reversal

A classic rule wants higher volume on the third candle as confirmation. On daily data, the 4 occurrences with volume above 1.5 times the 20-day average gave only 3 closed trades, too few to read, and the whole sample gave only 12: too few to split by volume or by the 200-day moving average.

Real-world examples of the pattern

The gallery in this section shows real upside gap two crows picked by our bench (best results, textbook shapes, most recent, typical draws), with their actual outcome. The cases described after the gallery are on daily stock and futures data, with stock prices adjusted for splits and dividends: a limited sample, not a measure of the setup.

Case study: a target reached in three weeks

On April 19, 2010, Citigroup (C) printed a white candle from 33.99 to 35.67. On April 20 it opened at 36.69, above that close, and ended at 36.33, a down session. On April 21 it opened higher at 36.77 and ended at 36.04, engulfing it but still above the first close of 35.67. The entry order at the low of the pattern (33.92) was triggered on April 26, with a stop at 36.99 and a 2:1 target at 27.78. Price reached the target on May 17, 15 sessions after entry. The stock was 15.2% lower 10 sessions after the pattern, a large move for a bank stock.

Case study: a setup canceled before entry

On September 18, 2024, copper futures printed a rising candle from 4.1885 to 4.238, followed by two down sessions that opened at 4.30 and 4.317 and ended at 4.286 and 4.2815. The entry at 4.1885 was never reached: on September 24 the contract rose to 4.4295, above the high of the pattern (4.318), which canceled the setup. Copper was 5.6% higher 10 sessions later. This is the most common outcome: 64.7% of daily setups were canceled this way.

Another winner, CHCO in January 2022, triggered its entry at 72.66 six sessions after the pattern and reached its target (68.09) on January 28, seven sessions after entry. None of the cases written up here ended at its stop: losing trades are counted in the statistics below.

Statistical reliability of the upside gap two crows

The upside gap two crows candlestick pattern is not reliable on its own: only the daily row with all markets together has enough occurrences to be tested (34), and its average excess return over the rest of the market did not pass our statistical test. Each market on its own, even US stocks with 28 cases, is rated "Not enough data": a sample this small is too thin to support any conclusion either way. Here are the numbers from our test bench, which applies the same rule to full price history and compares each occurrence with random bars on the same assets and with the rest of the market.

Read the table in pairs of columns. On the daily chart, 47.1% of occurrences were followed by a decline 10 bars later; random bars on the same assets were lower in 44.9% of cases. The excess return over the rest of the market after 10 bars is +1.18%, with a 95% confidence interval from −0.31% to +2.66%. Zero is inside the interval: no clear edge.

The last three columns are too thin to read. The daily short closed only 12 trades, rated "Not enough data": its hit rate (25.0% against 13.3% for the same entry, stop and target on random dates) and its expectancy (−0.16 R against −0.36 R per trade before costs) are shown, not interpreted. Random shorts lose money before costs because stock prices tend to rise over time. Our stock data also misses most delisted companies, a survivorship bias we have not sized that can make shorts look worse than they were.

Are the odds in your favor?

Nothing in our data says they are. On daily charts the 2:1 short closed only 12 trades in all the history we test, a sample our bench rates "Not enough data", and it only becomes a trading position in about a third of cases (35.3%). On weekly charts it almost never appears (1 in all our data). Academic research points the same way: in "Candlestick technical trading strategies: Can they create value for investors?" (Journal of Banking & Finance, 2006), Ben Marshall, Martin Young and Lawrence Rose tested candlestick trading strategies on large US stocks and found that they did not create value.

Common pitfalls and false signals

• Counting a third candle that closes below the first close: that is a two crows or an evening star, not this pattern.
• Selling at the closing price of the third candle without a trading plan: in most cases, price rose above the pattern before reaching the entry.
• Expecting it on crypto or forex: markets that run around the clock rarely jump overnight. No crypto or forex occurrence appears in our statistics, on any timeframe.
• Ignoring the cost of shorting a rising stock: even random shorts lost money in our tests.

Frequently asked questions

Summary: is this pattern right for your trading style?

• The upside gap two crows is a long white candle, a bearish candle gapping above it, and a larger bearish candle that engulfs the second but ends above the first close, after an uptrend.
• On 34 daily occurrences, 47.1% were lower 10 bars later, against 44.9% for random bars on the same assets.
• The 2:1 short closed only 12 trades, too few to read: 25.0% reached the target, against 13.3% for the same setup on random dates.
• The entry order was triggered in only 35.3% of cases on the daily chart.
• It is mostly a stock pattern: gaps are rare on crypto and forex.

If you trade it, treat it as a location for a position, not as a reason for one: combine it with the larger trend, other technical analysis tools and your own tested trading rules, define the stop before entering and keep the size modest. Past performance, including ours, does not guarantee future results, and this page is educational content, not investment advice.

About the author and the data. Written by Amaury, founder of PatternsWizard, who is passionate about finance, quantitative trading and data analysis. He built the PatternsWizard test bench, which detects each setup with published rules on full market history: crypto, forex, US stocks, ETFs, indices and commodities. The detection rules and the statistical tests are documented, and every result is compared with random bars on the same assets and with the rest of the market, with error margins and a correction for multiple testing, and the whole pipeline is checked on random-walk prices, where nothing can be predicted. Statistics on this page were generated on November 5, 2026 with version c2a1683f of the bench code. The full methodology explains every step.