☁️ Dark Cloud Cover Candlestick Pattern – Bearish Reversal Signal

The Dark Cloud Cover is a two-candle bearish reversal pattern that forms after an uptrend. It signals that selling pressure is emerging and the trend may shift from bullish to bearish.

📘 What Is the Dark Cloud Cover Pattern?

The Dark Cloud Cover is a two-candle bearish reversal pattern. The first candle is long and bullish, showing strong buying pressure. The second candle opens above the first candle’s high but closes below the midpoint of the first candle, signaling sellers are gaining control.

• Occurs after an uptrend or bullish market.
• First candle is long green (bullish).
• Second candle opens above the first candle’s high and closes below its midpoint.
• Indicates a shift from bullish to bearish momentum.
  
  
  

💡 Market Psychology

The first long green candle indicates strong buying pressure. The second candle, opening higher but closing below the midpoint of the first, shows that sellers have entered the market strongly. This pattern warns that bulls are losing control and a downtrend may start.

⚠️ Confirmation: The bearish reversal is confirmed if the next candle closes lower.

⚙️ How to Trade the Dark Cloud Cover Pattern

1. Identify the pattern after a clear uptrend.
2. Ensure the second candle closes below 50% of the first bullish candle.
3. Enter a sell (short) position after confirmation from the next bearish candle.
4. Place a stop-loss above the high of the second candle.
5. Set your target at the next support level or based on a 1:2–1:3 risk/reward ratio.
   
   
   

🏁 Conclusion

The Dark Cloud Cover candlestick pattern is a reliable indicator of potential bearish reversal. When supported by volume, resistance levels, and technical indicators, it helps traders identify early opportunities to enter a short position.

“When the Dark Cloud covers — the bulls fade, and the bears take control.”