Three Black Crows Strategy (Downtrend)

Three Black Crows Strategy (Downtrend) 

"Three black crows " - trading strategy aimed at defining the downward reversal on the uptrend (consisting of long descending candles).

Simple layout:

1. Find a strong uptrend consisting of several ascending (green) candles in a row;

2. Wait for a reversal – three descending (red) candles in a row

3. After closing the third candle, buy put option.

Advanced usage

The candlestick patterns are traditionally referred to as "reversal patterns" or "kicker patterns" as they warn about changing trends (not necessarily a reversal), when the trend graduates into a flat or the current movement slows down within one trend. For this reason, when using the candlestick patterns, we should also take into account other indicators like support and resistance levels, resistance, the Moving Averages, etc.