Chart Patterns

Piercing Pattern

Piercing pattern is multiple candlestick chart pattern that is formed after a downtrend indicating a bullish reversal.

It is formed by two candles, the first candle being a bearish candle which indicates the continuation of the downtrend.

The second candle is a bullish candle which opens gap down but closes more than 50% of the real body of the previous candle which shows that the bulls are back in the market and a bullish reversal is going to take place.

Traders can enter a long position if the next day a bullish candle is formed and can place a stop-loss at the low of the second candle.

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