Candlesticks Videos

The speaker talks through a candlestick pattern known as the piercing line, which is a two candle reversal pattern.  The body of the first candle is green while the body of the second candles is white.  The open of the second day gaps lower than the close of the first body but closes well into the middle of the first body.

He then moves on to discuss the dark cloud cover which is a two candle reversal pattern with the first candle being a strong up day and the second candle gapping higher but closing down, below the middle of the first candle.  This is a bearish reversal pattern.  He then moves on to illustrating this pattern through a real example. 

The speaker discusses several candlestick formations which can lead to reversals in the market.  He covers the spinning top, doji, dark cloud cover, bullish engulfing pattern, piercing pattern, bearish harami, bullish harami, hammer, and other candlestick patterns.  For each of these patterns, he discusses how the pattern is setup up and the implications of each formation.

The video discusses the dark cloud cover by providing a defintion, construction of the candlesticks that form this pattern, psychology of why this pattern works, and then walks through some live trading examples to illustrate his point. 

The dark cloud cover is a two candle, bearish reversal pattern.  The stock must be trending upwards and the first candle must be a strong up candle with the second candle gapping higher but closing down below the midpoint of the first candle.  You can see confirmation of this bearish setup with a close below the second candle.  Always set your stop loss orders in case the setup does not play out.