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Bearish reversal Candlestick pattern Two candles

Dark Cloud Cover Candlestick Pattern

Dark cloud cover is a long green candle followed by a red candle that opens above the green close and then closes below the midpoint of the green body.

Dark Cloud Cover candlestick pattern explained with labels: bearish signal on a 3D candlestick chart
Dark Cloud Cover: the highlighted candles show the pattern, the faded candles show the trend before it. Tap the image to zoom.

How to spot a Dark Cloud Cover

  • Appears after a rally
  • Candle 1 is a long green candle
  • Candle 2 opens higher, then closes below the middle of candle 1's body
  • Candle 2 does not close below candle 1's open (that would be an engulfing)

What the Dark Cloud Cover tells you

Buyers look in control as candle 2 opens higher, but sellers take back more than half of the previous green candle. At resistance, that is a warning that the rally may be ending.

How traders use it

  • Enter short on the close of candle 2 or after a confirming red candle
  • Place the stop above the pattern high
  • Target the next support level

Common mistakes

  • Counting it when candle 2 closes above the midpoint
  • Shorting a strong uptrend with no resistance nearby
  • No stop-loss
EP 01: Candlestick Patterns for Beginners See it on a real chart · EP 01Candlestick Patterns for BeginnersWatch the free lesson →

Questions about the Dark Cloud Cover

What does dark cloud cover mean?

It is a bearish two-candle reversal: after a strong green candle, sellers push price back below the middle of that candle.

Dark cloud cover vs bearish engulfing?

A bearish engulfing covers the whole green body. Dark cloud cover only takes back more than half of it, so it is slightly weaker.

For education only, not financial advice. The chart is an illustration of the pattern, not real market data. No pattern works every time; always use a stop-loss.

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