What is a dark cloud cover candlestick pattern?

This candlestick pattern is similar to the piercing pattern. The only difference is that piercing pattern occurs at the end of the downtrend, whereas dark cloud cover occurs at the end of an uptrend. What is a Dark Cloud Cover? How do I identify a dark cloud cover candlestick pattern? Is dark cloud cover a bearish candlestick?

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.

How do you know if a dark cloud cover pattern is a reversal?

The formation of this pattern is confirmed by the form of a bearish candle at the end of this pattern. Investors must look at a few characteristics when they trade with the dark cloud cover pattern: Firstly, the trend should be an uptrend, as the dark cloud cover pattern is a bearish reversal pattern.

What is a dark cloud cover piercing pattern?

The dark cloud cover is also often confused with the piercing pattern. As shown below, the piercing pattern starts with a big bearish candle and is then followed by a bullish (green) candlestick. In an engulfing pattern, the second candlestick usually surrounds the first one completely.