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How to trade piercing candlestick pattern

We already have discussed the dark cloud cover candlestick pattern, which is a well know bearish pattern. Is there any bullish counterpart of the dark cloud cover? Do you have this question on your mind as you have gone through Dark Cloud Cover? Piercing pattern is the answer.


Yes, there is and it is called a piercing pattern. Just as a dark-cloud cover is a top reversal, its opposite, the piercing pattern, is a bottom reversal. It is composed of two candlesticks in a falling market. The first candlestick is a red real body day and the second is a long, green real body day. This green day opens sharply lower, under the low of the prior red day.




Then prices push higher, creating a relatively long, green real body that closes above the midpoint of the prior day's red real body.

The bullish piercing pattern is akin to the bullish engulfing pattern. In the bullish engulfing pattern the green real body engulfs the previous red real body. With the bullish piercing pattern, the green real body only pierces the prior red body. In the piercing pattern, the greater the degree of penetration into the red real body, the more likely it will be a bottom reversal.

An ideal piercing pattern will have a green real body that pushes more than halfway into the prior session's red real body. If the market closes under the lows of the bullish engulfing pattern or the piercing pattern by way of a long red candlestick, then another downtrend should resume.

Criteria of Piercing Pattern

l  The market is in a downtrend. The bearish red real body reinforces this view.
l  The next day the market opens lower via a gap. The bears are watching the market with contentment.
l  Then the market surges toward the close, managing not only to close unchanged from the prior day's close, but sharply above that level.


The piercing pattern's green candlestick should push more than halfway into the red candlestick's real body.

Trading The Piercing pattern
This pattern does not confirm any target, however one can keep his SL just below the lower end of the green candle and may go for a long position.



If you like this article, don’t forget to bless it with your tweet or shares on your favourite social media.  Further, you might like to read Following Candlesticks Patterns:

Hammer and Hanging Man
Bullish and Bearish Engulfing Candlestick Patterns
Dark Cloud Pattern


Wanted to ask any question? Hit the comment box.

How to trade piercing candlestick pattern Reviewed by Ankit on March 09, 2020 Rating: 5

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