Defo watch this link
- Dark Cloud Cover ~ is a 2 candlestick bearish reversal pattern and must be in an uptrend, it is not valid at the bottom of a down trend. The first candlestick is a long bullish candlestick and the second is a long bearish candlestick that then opens above that first bullish candlestick (ideally inclusive of any wick showing on that first candlestick) and then closes below the mid point of that first bullish candlestick, Confirmation is from price then trading below of the second bearish candlestick, or even below the first bullish candlestick (see graphic). The physcology of the pattern is that the bulls no longer want to take things any further, possibly taking profits, therefor letting the bears back in, with the key being it dropping back below the 50% mark of that first bullish candlestick, as this shows that those bears have got a hold
Bare in mind, you could still get a further re-test (ie. upward move as this one is a bearish reversal pattern), even after that dark cloud cover reversal as the bulls might go again, but run out of steam, and fold further, you can then also look for further reversal patterns as they form to confirm this fold (remember your SL’s though)
Retest’s seems to be common in charts generally, watch for a re-test after a reversal pattern then further rejection from previous resistance which would be shown by S&R lines that had already been drawn on the chart by yourself, YOU NEED TO THINK ABOUT ALL THIS LEE, AS IT ALL MAKES SENSE !
There is nothing stopping you from adding further S&R lines as you go along from identifying further patterns as they develop, this may help you, REMEMBER THOUGH, S&R LINES ARE NOT AN EXACTING SCIENCE AND CAN BE USED REASONABLY ROUGHLY, NOT TOO ROUGHLY, JUST REASONABLY ROUGHLY
F=MA 