Dark Cloud is a trend reversal pattern. This signals the end of the upward momentum and the beginning of the downward momentum trend.
Confirmation is calculated as the price that opens down along the gap on the third day.
In this candle pattern, a green bullish candle is formed on the first day and a red bearish candle is formed on the second day.
The open price of the second day's candle is above the high price of the first day's candle and the closing price is lower than its middle in the range of the first-day candle.
When you see this design installed, it should be ready for sale and sold after confirmation.
Confirmation is calculated as the price that opens down along the gap on the third day.
A long green candle is formed following the established upward momentum as you can see in the chart above.
The next day the price opens up following the rally but it does not last and the closing price of that day falls below the middle of the first day's candle.
On the third day, the price opens very low which gives you a sell signal.
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