Dark Cloud Cover candlestick pattern
This is a reversal candlestick pattern which has two candlesticks.
1st candle – Bullish in nature
2nd candle – Bearish in nature
The illustration below shows the Dark cloud cover & Piercing pattern:
How does the Dark Cloud Cover candlestick pattern form?
From the illustration above, we can understand that:
The second candlestick opens above the first candles close.
The second candlestick closes below the middle of the first candle.
The indecision from both buyers and sellers gives rise to this pattern.
Piercing candlestick pattern
1st candle – Bearish in nature
2nd candle – Bullish in nature
The illustration chart above shows the Piercing pattern:
The second candle opens below the first candles close.
The second candle closes above the middle of the first candle.
The indecision from both buyers and sellers gives rise to this pattern.
Inference from Dark Cloud Cover and Piercing pattern
It is necessary for traders to wait and watch for the next price movement.
Exit point: If the next candlestick is bearish in nature.
Entry point: If the next candlestick is bullish in nature.
To ensure that our trading strategy is effective, its always recommended to mix and match the patterns and indicators.
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