Dark Cloud Cover candlestick pattern
A bullish candle followed by a bearish candle that opens above the prior close and closes below the midpoint of the prior body. The bearish mirror of the piercing line.
Illustrative shape. Real patterns vary in proportion.
How to identify a Dark Cloud Cover
- Appears after a rally
- First candle is a solid bullish body
- Second opens above the first candle's close or high
- Second closes below the midpoint of the first body
What the Dark Cloud Cover tells you
The second session opens with enthusiasm, but sellers take over and give back more than half the prior day's gain. A strong open that fails is a classic sign of exhaustion.
How traders use it
The deeper the second candle closes into the first, the more convincing it is. A close below the first candle's open would make it a bearish engulfing. Stops typically go above the second candle's high.
Before taking any pattern-based trade, decide your stop first and size the position from it with the position size calculator.
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Frequently asked questions
Is the Dark Cloud Cover bullish or bearish? +
The Dark Cloud Cover is a bearish reversal pattern. A bullish candle followed by a bearish candle that opens above the prior close and closes below the midpoint of the prior body. The bearish mirror of the piercing line.
How reliable is the Dark Cloud Cover? +
No candlestick pattern works every time. Patterns are more reliable when they form at a meaningful level (support, resistance, a moving average), after a clear trend, on higher volume, and when the next candle confirms them.
Do I need confirmation to trade the Dark Cloud Cover? +
Most traders want it. Waiting for the next candle to move in the expected direction filters out many false signals, at the cost of a slightly worse entry price.
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