Piercing Line Candle & Dark Cloud Candlestick
Piercing Line Candle and a Dark Cloud Candle both look similar but the difference is that one +occursforms at the top of a Gold price uptrend (Cloud Cover) and the other occurs at the bottom of a downward XAUUSD Gold price trend (Piercing Line).
Upward Trend Reversal - Dark Cloud Cover CandlesticksDownwards Trend Reversal - Piercing Line Candles
Piercing Line Candlestick
Piercing line candle is a long black body which is followed by long white body candlestick.
The white body pierces the mid point of the previous black body.
This piercing line candle set-up is a bullish market reversal pattern that occurs at the bottom of a market down trend. It shows that the market opens lower and closes above the midpoint of the black body candlestick.
This pattern shows that the energy of the downtrend is decreasing and the current market trend is likely to reverse & move in an upwards direction.
This piercing line candle pattern setup is put to display as a piercing line signifying and signaling that the market is piercing the bottom therefore representing a market floor for the XAUUSD Gold price downward trend.
Piercing Line Candle Pattern
Technical Analysis of Piercing Line Candlestick
A buy signal generated using the piercing line candle pattern is confirmed once price closes above the neckline which is the opening of the candle on the left of the Piercing Line candle as displayed & shown on the illustration put on display above.
This is a bullish setup & Gold price should continue moving upwards and for a trader who puts a buy trade using this setup should put a stop loss just below the lowest price level.
Dark Cloud Candlestick
Dark cloud cover candle is the in the opposite trend trend trend of the piercing line candle - this pattern occurs at the top of an uptrend.
Dark cloud cover candle is a long white body which is followed by a long black body.
The black body pierces the mid point of the prior white body.
Dark cloud cover candle is a bearish price reversal trade pattern that occurs at the top of an up trend.
It shows that the market opens higher and closes below the midpoint of the white body.
Dark cloud cover candle pattern shows that the energy of the uptrend is decreasing and the trend is likely to reverse & move in a downward direction.
This candle setup is displayed are referred to as a cloud cover signifying and signaling the cloud as a ceiling for the XAUUSD Gold price upward trend.
Dark Cloud Candle Pattern
Technical Analysis of Dark Cloud Candlestick
A sell signal generated using this candle pattern formation is confirmed once price closes below the neckline which is the opening of the candle on the left of this candle as shown above.
This is a bearish setup & Gold price should continue moving downward and for a xauusd trader who puts a sell position they should place and put a stop loss just above the highest price level.
Study More Tutorials & Topics:
- Placing Arrows in XAU USD Charts on MetaTrader 4 Platform Software
- What are XAU USD Chart Trade Patterns?
- Where to Determine When to Buy on a Gold Upward Trend
- How to Use TP XAU/USD Orders & Use Stop Loss Gold Order in MT4 Platform Software
- Best XAU USD Brokers Gold Platforms for Beginner Traders
- XAUUSD Save a Chart Template in MT5 Trade Platform
