How to Use Dark Cloud Cover

Forex candlestick strategy could be implemented in your trading system. One of the best candlestick pattern is Dark cloud cover, this trading pattern is traded to determine the market trend changes in a uptrend. Forex participants can trade candlestick patterns as a filter or a confirmation analysis, when trading with a trading system.

For many Foreign exchange participants, using market price action begins with the ability to read and know the candlestick patterns. When the Forex trades know the main rules, candlesticks can be showed in formations to filter and help to read the market price reversals.

Dark cloud cover is one of the most traded candlestick formations, in this article we are going to learn this candlestick formation and how dark cloud cover can be traded in your trading system to read and determine the price reversals.

This formation is a reversal candlestick formation built of 2 candlesticks. In the image above you can see that the formation shows a reversal in a bullish trend. To determine dark cloud cover, you have to determine a long bullish candlestick. This long bullish candlestick gives critical uptrend potential through the completion of the market period. The 2nd candlestick formation should follow the bullish trend. building a long bullish tail, and then close with a falling down trend. This situation shows the 2nd candlestick is going to close in bearish and should close near the preceding open price.

Dark Cloud Cover is traded to determine if the bearish is moving back into the field. The big tail of the 2nd candlestick shows that bullish is no longer have power, and they can not push up the price any more. With this situation, the market is seemly move bearish or try to push down towards lower lows.

How to use Dark cloud cover in trading?
In the picture above you can see this formation on the trading chart. As you can see the market price has been in bullish trend, and retracement was showed with a dark cloud cover candlestick pattern. When we get used with this dark cloud cover, we can smoothly trade it into any Forex trading system. Experienced traders will trade this candlestick pattern as a filter and confirmation tool. And if the market price is trading in bearish trend this pattern can give new bearish trading opportunity.