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Two failed attempts to continue higher after gapping up. The unfilled gap becomes resistance as reversal begins.
The Upside Gap Two Crows is a three-candle bearish reversal pattern similar to the Two Crows but more specific. After a long bullish candle, two small bearish candles appear that both gap above Candle 1's close — the second crow engulfs the first, but both remain above the gap.
The key difference from regular Two Crows is that both bearish candles maintain the upside gap — they don't close back into Candle 1's body. Despite this, the two bearish candles within the gap signal distribution and an impending reversal. The 'crows' are perched above but looking down.
Upside Gap Two Crows show distribution occurring within a bullish gap. Candle 1 is a strong bullish candle. The uptrend is running. Then a gap up occurs — Candle 2 opens above Candle 1's close.
But Candle 2 is bearish despite the gap up. Sellers push price lower during the session, though it still closes above Candle 1's high. This is the first warning — a bearish candle in bullish territory.
Candle 3 opens above Candle 2's open and closes below Candle 2's close — engulfing the first crow while still remaining in the gap. Two consecutive bearish sessions above the market suggest smart money is distributing into the gap. The bullish gap that should have been a continuation signal is being used as an exit opportunity.
Conservative: Enter short when price closes below Day 1's close, filling the gap.
Aggressive: Enter short on a break below Day 3's low.
Above the high of the pattern (the highest point among the gap and crow candles). If price pushes to new highs, the bearish signal is invalidated.
T1: Close of the first (large bullish) candle. T2: Previous swing low. The unfilled gap with two bearish candles shows strong distribution - expect follow-through if confirmed.
Minimum 1:2. Wait for a bearish confirmation candle before entering to improve reliability.
The Upside Gap Two Crows is rarer than standard Two Crows because both bearish candles must remain within the upside gap. It signals distribution — sellers are using the gap as an exit, which typically leads to a gap fill and then continuation downward.
Similar to two crows but with a gap that doesn't fill. Even more bearish due to the unfilled gap.
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