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suggests that sellers have begun to take charge of the
market, and buyers have been shaken out by the sudden
loss of bullish momentum. Downtrends are common after
this formation as more sellers confidently enter the market
with a clear protective stop level just above the highs of
the formation.
However again, some traders wait for further confirmation
regardless of how deep the Dark Cloud Cover penetrates
the second day. They would look for another down day
and sell on the open of the next candle. Protective stops
would then be placed above the high of the formation.
market, and buyers have been shaken out by the sudden
loss of bullish momentum. Downtrends are common after
this formation as more sellers confidently enter the market
with a clear protective stop level just above the highs of
the formation.
However again, some traders wait for further confirmation
regardless of how deep the Dark Cloud Cover penetrates
the second day. They would look for another down day
and sell on the open of the next candle. Protective stops
would then be placed above the high of the formation.
