The Piercing candlestick pattern, also known as the sharp line candlestick pattern, is one of the most popular candlestick patterns in trading. This is a reversal candlestick pattern consisting of 2 candles. The first candle is a bearish candle with a big real body and a small tail. The second candle is bullish and also has a large real body. This second candle opens should be below the low of the first day but closes more than half of the real body of the previous candle. The picture below is the Piercing candlestick pattern, you can see for more clarity:


This is a typical reversal candlestick pattern that usually occurs at the end of a downtrend. If you see this pattern appear at the end of a downtrend, this is the signal of a reversal that the market is giving you. But note that this pattern is only a reversal signal and not a confirmation of a reversal. If we want to trade this candlestick pattern, we need to determine more information.

On the first candle with a large real body, it showed strong selling pressure, but on the second candle, it opened lower than the previous one, but in the end, the price reversed and closed more than half of the previous candle's real body. shows that previous selling pressure has been absorbed by buyers in the market. This sudden buying pressure will have a psychological impact on previous sellers, while also suggesting that the price is likely to reverse because of the presence of buyers.

The signals from the Piercing candlestick pattern will not be reliable if they appear in the middle and do not have a specific market context. But if this signal appears at the end of a downtrend or a bearish pullback during an uptrend, simultaneously with supportive resistance and momentum in favor, or in combination with a technical indicator, presence. This candlestick pattern will serve as a more reliable trading signal, prompting more buyers to enter the market.

You see the picture below:

In the stock market, the Piercing candlestick pattern occurs more often because gaps occur more often in the stock market:


It can be seen that after the Piercing candlestick pattern appeared, the price reversed after that.

Each candlestick pattern in a price chart is only a short-term signal, they are not intended to predict the long-term direction of the market. The Piercing candlestick pattern is no exception. This pattern usually only plays a role in signaling the next direction of the market in the next 5 candles. Even less. If we want to get the profits we set or go down the market to maximize profits then we have to rely on other more powerful information such as trend, momentum, resistance support. or information from technical indicators, ... New can maintain their trading orders according to price action.

This is a fairly simple model, easy to define. However, in order to trade them most effectively, the trader should combine them with a suitable market context, with good momentum and this pattern should appear at a strong support resistance that will best promote its value...

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