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What is dark cloud cover?

Dark Cloud Cover is a candlestick pattern that shows a shift in momentum to the downside following a price rise. The pattern is composed of a bearish candle that opens above but then closes below the midpoint of the prior bullish candle. Both candles should be relatively large, showing strong participation by traders and investors.

Is dark cloud cover a bearish reversal pattern?

Dark Cloud Cover is a bearish reversal pattern. Like “Bearish Engulfing” pattern, it forms with two candles. The second candle opens little above the close price of the first candle, and goes down and closes a little above the open price of the first candle. Dark Cloud Cover forms on uptrends and is a strong reversal pattern.

What is a dark cloud cover Candlestick?

The Dark Cloud Cover pattern is used by many traders to spot reversals in the market and achieve favorable risk to reward ratios. It is fairly easy to spot, however, traders need to view the formation of the Dark Cloud Cover candlestick in conjunction with other crucial factors and avoid simply trading as soon as the pattern appears.

What is dark cloud cover piercing line?

Dark Cloud Cover forms by a bearish candlestick that opens above the close price of the previous bullish candlestick. The bearish candlestick goes down and covers most part of the body of the previous bullish candlestick. Piercing Line is the bullish form of Dark Cloud Cover pattern. It forms at the bottom of a downtrend or a bear market.

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