Overview
Bearish Two Crows
Niwa Garasu
Also known as: Two Crows, Double Crow Pattern
The two crows pattern features a long bullish candle followed by two bearish candles that gap above it. The second crow engulfs the first and closes into or below the bullish candle's body, signaling that the uptrend is failing despite the initial gaps higher.
The bearish two crows is a three-candle reversal pattern that appears at the top of an uptrend. It begins with a strong bullish candle confirming the existing trend. The second candle gaps above the bullish candle but closes bearish (forming the first 'crow' or dark cloud above the trend). The third candle opens above the second candle's open (attempting to continue higher) but then reverses and closes below the first candle's close, completing the reversal. The pattern is significant because despite two attempts to gap higher, price ultimately falls back into and below the prior bullish candle's range, demonstrating that the upward gaps were false signals. The two crows represent the failure of the last bullish attempts before sellers take control.
History & Etymology
The two crows pattern is from classical Japanese candlestick analysis, described by Nison. The crow metaphor (dark, ominous candles above the bright bullish candle) reflects the pattern's bearish implications. It is considered a variant of the upside gap two crows pattern.
'Two crows' refers to the two bearish (dark/black) candles that sit above the bullish candle like crows perched on a branch. In Japanese, 'niwa garasu' relates to crows in a garden—unwelcome visitors signaling trouble.
How It Forms
Formation Steps
- 1First candle is a long bullish candle continuing the uptrend
- 2Second candle gaps up but closes bearish (black), forming a small crow above the first candle
- 3Third candle opens above the second candle's open but closes below the first candle's close, engulfing the second candle
Prerequisites
- Established uptrend
- The gap up between first and second candles is essential
Confirmation Signals
- Fourth candle continues the decline
- Volume increases on the third candle
- RSI dropping from overbought
Invalidation Signals
- Price rallies above the second candle's high
- Strong bullish volume after the pattern
- The third candle fails to close below the first candle's close
Candle Breakdown
Bullish Foundation
A long bullish candle confirming the uptrend.
Strong buying keeps the uptrend alive. This candle represents the last strong bullish conviction.
First Crow
Gaps above the bullish candle but closes bearish, forming a small dark body above the prior candle.
Despite gapping higher, sellers push price back down. The bearish close despite the gap is an early warning.
Second Crow
Opens above the first crow but closes below the first candle's close, engulfing the first crow and closing into the bullish candle.
The final attempt to rally fails spectacularly. Sellers overwhelm the remaining buyers, and price falls through the prior bullish candle's close.
Psychology
Despite two bullish gaps (higher opens), the market cannot sustain the advance. The progressively deeper bearish closes signal that sellers are absorbing all buying pressure and taking control.
Buyer Perspective
Buyers are initially encouraged by the gaps higher but increasingly concerned as each session fails to hold its gains. The third candle closing below the first candle's close is the capitulation trigger.
Seller Perspective
Sellers see the gaps higher as liquidity traps—opportunities to sell at higher prices. The third candle's decisive close below the first candle confirms their thesis.
Smart Money Action
Institutional sellers use the gap-up opens as opportunities to fill sell orders at premium prices, creating the dark bodies above the bullish candle.
Retail Trader Trap
Retail traders buy the gaps higher expecting continuation, only to be trapped when the third candle reverses the entire advance.
Emotional Cycle
Trading Strategy
Aggressive Entry
Enter short at the close of the third candle when it closes below the first candle's close.
Conservative Entry
Wait for the fourth candle to close below the third candle's low for full confirmation.
Previous swing low
Measured move equal to the first candle's range
Next major support
Best Conditions
- Timeframe: 1D
- Timeframe: 4h
- After extended rallies
- Near resistance
- Asset: Stocks
- Asset: Indices
- Asset: Forex
Avoid When
- Timeframe: 1m
- Timeframe: 5m
- Strong momentum markets
Confluence Factors
- Pattern at resistance
- RSI overbought
- Third candle with heavy volume
- Bearish divergence
Scale In Strategy
Enter on the third candle, add on any retest.
Scale Out Strategy
Take 50% at first support, trail rest.
Risk Management
Volume Analysis
Volume Confirmation
Volume should increase on the third candle, confirming selling conviction.
Volume Profile
Higher volume on the third candle than the second confirms escalating selling.
Volume Divergence
Low volume on both crows suggests insufficient selling conviction.
Technical Confluence
Support Resistance
The crow highs become resistance. The first candle's open becomes a support target.
Fibonacci Levels
The crows often form at Fibonacci extension levels.
Moving Averages
The pattern near a major moving average adds confluence.
Rsi Confirmation
RSI declining from overbought during the pattern confirms the reversal.
Macd Confirmation
MACD turning negative adds momentum confirmation.
Bollinger Bands
Crows near the upper band with a close back inside signal overextension.
Vwap
Third candle closing below VWAP confirms the bearish shift.
Ichimoku Cloud
Pattern above the cloud with the third candle approaching it.
Elliott Wave
May mark the end of Wave 5.
Wyckoff Phase
Can appear during the BC or UTAD in distribution.
Market Profile
Failed auction above value with rotation back inside.
Order Flow
Negative delta accelerating on the third candle confirms institutional selling.
Open Interest
Rising open interest during the pattern suggests new short positions.
Multi-Timeframe Analysis
Higher Timeframe Alignment
Daily two crows at weekly resistance.
Lower Timeframe Entry
4H entry after the daily pattern completes.
Timeframe Confluence
Daily pattern in weekly overbought conditions.
Top-Down Approach
Weekly overbought > Daily two crows > 4H entry.
Statistics
Historical Examples
Tesla Two Crows Formation
successTesla formed two crows after a strong earnings rally. Two consecutive gap-up sessions that closed bearish preceded a 15% decline.
Lesson: In momentum stocks, gap-up sessions that close bearish (crows) are significant warning signals.
Variations
Upside Gap Two Crows
A stricter version where the gap between the first candle and the crows is maintained.
Confusion Matrix
Patterns commonly confused with Bearish Two Crows and how to distinguish them.
Bearish Upside Gap Two Crows
8500% similarIf a gap remains between the first candle and the two crows, it is the upside gap variant. If the third candle closes into the first candle's body, it is the standard two crows.
Key Differences
- Upside gap two crows requires the gap to remain unfilled between the crows and the first candle
- Standard two crows may have the third candle close into the first candle's body
- Upside gap version is slightly more bearish
Three black crows is a powerful bearish reversal pattern consisting of three consecutive long bearish candles, each opening within the prior candle's body and closing near its low. It signals strong, persistent selling pressure and a likely trend reversal.
The upside gap two crows features a long bullish candle followed by two bearish candles that gap above it. Crucially, the gap between the first candle and the crows remains unfilled, creating an 'island' of bearish candles. The third candle engulfs the second, confirming the reversal.
The Bearish Abandoned Baby is one of the rarest and most reliable top reversal patterns in candlestick analysis. It features a doji that is completely isolated by gaps on both sides, signaling an abrupt and dramatic shift from buying to selling pressure.
The Bearish Advance Block shows three consecutive bullish candles with progressively smaller bodies and longer upper shadows, signaling that buying momentum is weakening and a reversal or consolidation is likely.
The Deliberation pattern shows two strong bullish candles followed by a small-bodied third candle, indicating that the uptrend is 'deliberating' — the bulls have stalled and are uncertain about pushing higher.
The Downside Tasuki Gap is a bearish continuation pattern in a downtrend where a gap-down is partially but not completely filled by a bullish candle, suggesting that the downtrend will continue as the gap acts as resistance.
Pro Tips & Common Mistakes
Pro Tips
- The gap between the first candle and the crows is essential—without it, the pattern loses significance.
- The third candle's close relative to the first candle determines the pattern's severity.
- Two crows often precede larger sell-offs—treat them as a first warning rather than the final signal.
- The pattern is most common in stocks and indices where overnight gaps are frequent.
Common Mistakes
- Not requiring the gap component
- Trading in 24/7 markets where gaps are rare
- Ignoring volume on the third candle
Advanced Techniques
- Compare the sizes of the two crows: if the second is larger, selling is accelerating.
- Track the gap fill: if the gap fills quickly, the reversal has more conviction.
Institutional Perspective
The gap-up opens represent overnight buying (often from retail earnings traders), while the bearish closes reflect institutional selling into the euphoria.
Fun Facts
- The crow metaphor appears repeatedly in Japanese candlestick patterns (two crows, three crows, upside gap two crows), always as a bearish omen.
- Crows in Japanese culture are associated with both misfortune and intelligence—a fitting metaphor for smart money selling.
Frequently Asked Questions
A three-candle reversal: a long bullish candle followed by two bearish candles that gap above it. The crows (bearish candles) signal that despite gaps higher, sellers are winning. The second crow closes into the first candle's body.