#4: Dark Cloud Cover Candlestick Pattern
The dark cloud cover candlestick pattern is a 2 candlestick pattern formation.
The first candlestick is a bullish candlestick. The second candlestick is a bearish candlestick. But here’s the thing with the second bearish candlestick: it has to at least close 50% below the previous period’s price range.
The fact that the 2nd bearish candlestick closes more than 50 % below the first bullish candlestick means that bears have now taking control and the trend is most likely to head down.
Here’s what a dark cloud cover candlestick pattern looks like:
Where Dark Cloud Cover Patterns Form On A Chart
Look for dark cloud cover patterns on:
- resistance levels
- downward trendline touches
- fib retracement levels