Trading is always the high-probability game, and if you know the maximum trading patterns, you can make the right decision at the right time. The following two patterns are important to signal the possible market change during the continuation of the trend.
Piercing Line
This pattern appears during the downward trend. When a bearish candlestick is followed by a bullish candlestick that opens below the previous day’s low but closes above the previous day’s midpoint. This pattern indicates a possible trend reversal to the upside.
Moreover, this pattern indicates the market has huge pressure from the buyer’s side, and this pattern always appears at the bottom of a downtrend, encouraging more people to buy. In addition, before taking any decision, first verify the higher highs to confirm the upcoming uptrend, because you can’t avoid the short-term reversal. To secure your position, you can use the stop-loss order and set it according to the previous day’s low to protect against losses.
Dark Cloud Cover
If you grasp the idea of a piercing line, then this pattern is the opposite. It forms when one bullish candlestick is created and followed by a bearish candlestick that opens above the previous day’s high but closes below the previous day’s midpoint.
This pattern indicates the possible trend reversal, but before making any decisions, you should verify the market sentiment. Compared to the piercing line, the Dark Cloud Cover is more accurate during the long uptrend. Like other patterns, you can use this pattern with others, such as support and resistance levels and moving averages, to learn about the market forces.
In summary, trading requires too much time for research and analysis and less time to execute the trading operation. During an uptrend and downtrend, if you get a reasonable clue to enter and exit the market at the right time, you can not only save your investment but also ensure a reasonable profit.
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