Bearish Upside Gap Two Crows

An upside gap two crows is a three-candle top that traps late buyers. A strong up candle continues the rise, then the market gaps higher to open the next bar. But that bar closes red, and the third bar opens higher still and also closes red, swallowing the second and erasing back into the gap. Two down candles, the crows, sit above the rally and show buyers could not hold the higher ground.

How to spot it

• The market is rising into the pattern.
• The first candle is a solid up (green) candle that fits the advance.
• The second candle gaps up but closes red, a down candle floating above the first.
• The third candle opens higher than the second, closes red, and swallows the second body.
• The third candle still closes above the first candle’s close, so the gap is not fully filled.
• The two red candles overhead are the crows.

The dashed box on the chart above marks the three candles on a real occurrence, with the advance before and the move after.

The psychology

The first candle keeps the rally going, then the market gaps higher to open the second bar, and buyers look thoroughly in charge. But the second bar closes red, fading from its open. The gap held, yet the buyers who chased it could not push on and instead handed some of the gain back. That is the first crow: a down bar floating above the rally, hinting the higher ground is harder to keep than it looked.

The third bar opens higher still, tempting more buyers in, then also closes red and swallows the second body. Two failed pushes now sit overhead. Each time the market gapped up, sellers met the buying and forced a lower close, so everyone who bought into those gaps is offside. Price still closes above the first candle, so the gap is not fully filled, but the message is clear: buyers keep reaching for higher prices and keep getting rejected. The late money is trapped above, and as it tries to escape, the pressure turns downward.

Whether that trap leads to a real decline is the question the figures below take up.

Does it actually work?

A pattern is a setup, not a trade, so the honest question is not “did it win” but “how much room did it tend to offer before it was proven wrong.” The tabs below answer that across five futures markets (Nasdaq, S&P 500, gold, crude oil, natural gas) and seven timeframes from one minute to one day.

For each occurrence we measure the room the move offered in units of the pattern’s own risk, then set it against what a random entry on the same market would have done. When the pattern offers more room more often than chance, that shows up as a real edge. When it does not, the page says so plainly.

Read it with the sample size in view. On the faster timeframes a pattern can fire thousands of times, enough to trust. On the daily chart it is far rarer, so treat those numbers as a hint rather than a verdict. Thin samples are flagged for you on the page.

How we measured it

• Entry is the close of the final candle of the pattern.
• One unit of risk, 1R, is the distance from that close up to the pattern’s invalidation point: the highest high of the three candles that form it. If price trades through there, the setup is wrong.
• We then follow the next 20 bars and record how far price ran in your favor, in multiples of that risk, before the stop was hit.
• Every figure is set against a random entry on the same market and timeframe, so the market’s own drift is accounted for.
• No profit target and no position sizing. Where you take profit is a strategy choice; this measures only the room the pattern tends to give.

What this page does not cover

• Volume on the pattern’s candles.
• Whether the pattern forms at a meaningful resistance level.
• Pairing it with a trend filter or a confirming signal.
• A profit target or position sizing. We use the pattern’s own invalidation point as the stop to define risk, but where you take profit, and how much you put on, are strategy decisions this page leaves to you.