The Dark Cloud is a bearish reversal candlestick pattern that indicates a potential reversal of an uptrend. It is formed by two candles:

* First Candle : A large bullish (green) candle, indicating strong upward momentum.
* Second Candle : A bearish (red) candle that opens above the previous candle’s close and closes below the midpoint of the first candle, creating a “dark cloud” effect.

This pattern signals that the buyers are losing control and the sellers are starting to take over.

How Traders Use It:
* Entry Point : Sell when the second candle closes below the midpoint of the first candle.
* Stop-Loss : Place it above the high of the first candle to limit risk.
* Target Price : Estimate a target based on previous support levels or by using other technical indicators.

The Dark Cloud pattern is often used in trending markets to identify potential bearish reversals and capitalize on downward price movement.