The upside gap two crows candlestick pattern is a 3-bar bearish reversal pattern.
It appears during an uptrend.
Statistics to prove if the Upside Gap Two Crows pattern really works
Are the odds of the Upside Gap Two Crows pattern in your favor?
How does the Upside Gap Two Crows behave with a 2:1 target R/R ratio?
From our research the Upside Gap Two Crows pattern confirms 55.9% of the time on average overall all the 4120 markets we analysed. Historically, this patterns confirmed within 2.1 candles or got invalidated within 3.1 candles. If confirmed, it reached the 2:1 R/R target 38.6% of the time and it retested it's entry price level 95.8% of the time.
Not accounting for fees, it has an expected outcome of 0.158 $/$.
It means for every $100 you risk on a trade with the Upside Gap Two Crows pattern you make $15.8 on average.
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How to handle risk with the Upside Gap Two Crows pattern?
We analysed 4120 markets for the last 59 years and we found 598 occurrences of the Upside Gap Two Crows pattern.
On average markets printed 1 Upside Gap Two Crows pattern every 26 091 candles.
For 2:1 R/R trades, the longest winning streak observed was 7 and the longest losing streak was 9. A trading strategy relying solely on this pattern is not advised. Anyway, make sure to use proper risk management.
Keep in mind all these informations are for educational purposes only and are NOT financial advice.
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What is the upside gap two crows candlestick pattern?
The upside gap two crows candlestick pattern is a bearish reversal pattern that appears during an uptrend. It has three candles. The first candle appears during an uptrend that has a long increasing body. The second candle is a bearish one that tends to create an upwards gap between the previous open and close. The third decreasing candle totally engulfs the second candle. The third candle of the upside gap two crows pattern also tries to quickly fill the gap, with a bearish movement, between the first two candles. This bearish movement of the third candle further decreases the prices.
How to identify the pattern?
The upside gap two crows candlestick pattern is a bearish reversal pattern is a pattern with three days of formation. A trader must look for the following characteristics to correctly identify the upside gap two crows pattern.
A long white first candle that represents the continuation of the uptrend and a bearish strong candlestick must follow this candle.
A small black or colored second candle with a small real body that gaps up and represents a second bearish day.
A bigger black or colored third candle that gaps up totally immerses the second candle because it opens above it and closes below it. It is also necessary for the third candle to close above the first day’s close.
What does the upside gap two crows candlestick pattern tell traders?
Market understanding is important for successful trading. Traders can improve their market understanding by watch and analyzing the price data and movements in the market. The chart patterns are the most fundamental tools for this purpose. The upside gap two crows pattern is a fascinating chart pattern that also has the potential to clearly portray the picture of the market in front of the traders and technical analysts. During a bullish trend, there is a lot of buying pressure that continues to push prices higher. This is the reason that the first bullish candle of the upside gap two crows pattern forms. The market again opens with a positive gap followed by the finishing of the last candle in the negative territory. This indicates that buying pressure from the bulls has lost control of the selling pressure exerted by the bears. This is the beginning of a downtrend.
The upside gap two crows candlestick pattern also generates sell signals in the overall trading strategy. Moreover, it also tells about mass psychology. Successive gap ups form during an uptrend or within the bounce of a downtrend. Those successive gap ups close down to force the formation of a black candle that suggests the bulls are losing control and the bears are now in power. Although the upside gap two crows pattern is certainly a foreboding pattern, it is difficult to correctly identify the two crows. However, a confirmation is also required after successfully spotting of the crows. That is the reason that it is always important to use the upside gap two crows pattern in conjunction with other technical analysis tools.
How does the Upside Gap Two Crows pattern look in real life?
Russell is an Algorithmic & Technical Analyst Trader @ PatternsWizard. His passion is to share his knowledge about TA, patterns & more. Why hope for your trading to work when you can precisely know the performance stat of every pattern?
We loved Marwood Research’s course “Candlestick Analysis For Professional Traders“. Do you want to follow a great video course and deep dive into 26 candlestick patterns (and compare their success rates)? Then make sure to check this course! PS: Get 20% off with the code SAVE20
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