P
PipsGrowth

Key Takeaways

Success Rate:60%
Difficulty:Intermediate
Strength:
R:R Ratio:1:2
☁️

Dark Cloud Cover

bearish reversalHigh Reliability2 Candles

Bearish counterpart to piercing line. Second candle opens above the first high but closes below the midpoint of the first candle.

Market Psychology

Opening higher suggested continuation, but sellers drove price down aggressively, recovering more than half of prior gains.

Candle Structure

1st2nd

Trading Setup Example

Entry, stop loss, and take profit levels.

How to Trade the Dark Cloud Cover PatternTake Profit📥 EntryStop LossPatternConfirmEnterSELLPatternConfirmEnterSL/TP

Always wait for pattern confirmation before entering a trade.

Where This Pattern Appears

Trend context and market position.

UptrendDark Cloud CoverReversal ↓

Appears at the top of an uptrend, signals bearish reversal.

How to Identify

1

First candle is a long bullish candle

2

Second candle opens above the first candle high (gap up)

3

Second candle closes below the midpoint of first candle body

4

Appears after an uptrend

Confirmation Signals

RSI overbought (>70)
At key resistance
Volume spike
Bearish next candle

Trading Strategy

📥 Entry

Enter short on close of second candle or break below second candle low

🛑 Stop Loss

Place stop above the pattern high

🎯 Take Profit

Target previous support levels

⚖️ Risk/Reward

1:2

Common Mistakes to Avoid

Trading without prior uptrend
Not waiting for confirmation
Ignoring volume
Fighting strong trend

Pro Tips

💡Deeper penetration into first candle = stronger signal
💡Gap up opening is important for validity
💡Works best on higher timeframes

Best Timeframes

4HDaily

Pattern Variations

At resistance level (stronger)
With gap open
آخر تحديث: ٢٩ ديسمبر ٢٠٢٤

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Frequently Asked Questions