Trade Forex Trading

Learn Lessons, Strategies and Technical Analysis

Piercing Line and Dark Cloud Cover

 

A piercing line and a dark cloud look alike but the difference is that one occurs at the top of a Forex uptrend (Cloud Cover) and the other occurs at the bottom of a downwards Forex trend (Piercing).

 

Upward Trend Reversal - Dark Cloud Cover Candlesticks

 

Downward Trend Reversal - Piercing Line Candlesticks

 

Piercing Line Candlestick

Piercing line is a long black body followed by a long white body candlestick.

 

The white body pierces the midpoint of the prior black body.

 

This is a bullish reversal pattern that occurs at the bottom of a market downtrend. It shows that the market opens lower and closes above the midpoint of the black body.

 

This shows that the momentum of the downtrend is reducing and the market trend is likely to reverse and move in an upward direction.

 

This pattern is shown known as a piercing line signifying the market is piercing the bottom showing a market floor for the currency price downward trend.

 

Piercing Line candlestick Pattern

Piercing Line Candlestick

 

Technical Analysis Piercing Line Candlestick

A buy signal is confirmed once price closes above the neckline which is the opening of the candlestick on the left of the Piercing Line candlestick.

 

This is a bullish setup and price should continue moving upwards and for a trader who puts a buy trade just below the lowest price level.

 

Regulated Broker

 

Dark Cloud Cover Candlestick

Opposite of piercing candlestick.

 

This candlestick is a long white body followed by a long black body.

 

The black body pierces the midpoint of the prior white body.

 

This is a bearish reversal pattern that occurs at the top of an uptrend.

 

It shows that the market opens higher and closes below the midpoint of the white body.

 

This shows that the momentum of the uptrend is reducing and the market trend is likely to reverse and move in a downward direction.

 

This pattern is shown known as a cloud cover signifying the cloud as a ceiling for the currency price upward trend.

 

Dark Cloud Cover candlestick Pattern

Dark Cloud Cover Candlestick

 

Technical Analysis Dark Cloud Cover Candlestick

A sell signal is confirmed once price closes below the neckline which is the opening of the candlestick on the left of this candlestick.

 

This is a bearish setup and price should continue moving downwards and for a trader who puts a sell trade just above the highest price level.

Market Sentiment: Did you know that traders and market participants have been buying US Dollars because USD is the best currency to hold when there is a recession – this is because the dollar is held as the reserve currency by most central banks and during recession most traders also prefer to hold this currency, this is why USD is known as a safe haven currency. But now the market sentiment has changed and all the economies are on their way to recovery and most have even returned to economic growth based on the economic reports coming from these countries.

During times of economic growth traders prefer to sell the dollars they had bought and start buying higher yielding currencies. These higher yielding currencies include EURO and Great Britain Pound. This is why the Euro is starting to appreciate against the USD. The EURUSD is trending upwards; Crude Oil Prices have also started to move back up because demand of oil is growing because of the global economic growth, Gold is also in an upward trend because during economic growth the prices of commodities also go up because there is increase in their demand.

Takes 4 to 6 weeks to open an account, open early or fast track: Read The Article "Account Opening Procedure"

Trade with the Best Forex Broker: Read The Article "Best Forex Broker"

Poland FX Seminar Gala

XM Account Holders Attend Poland FX Seminar

XM Account Holders Hungary Seminar

Malaysia Seminar

XM Account Holders Phillipines Seminar

XM Account Holders Thailand Seminar

Regulated Online Broker

Australia Regulated Forex Broker

Forex Bonus Up To $5000

Forex Trading Championship

Silver and Gold

XM Rally Car

Regulated Broker

 

Open Forex Account

Open Demo Account
Open Real Account

Open A Forex Account

Open Demo Account
Open Real Account

Up To $5K Forex Bonus

MQL5 Signals

1 Million Forex Championship