What is a dark cloud cover?

The top of the dark cloud is composed of two different colored Yin and Yang candles at the top of the chart, which belongs to the turning shape of falling back at the top, and usually appears after the upward trend.

The basic characteristics of dark clouds cover:

1, the first day of the upward trend is the rising Changyang line;

2. On the second day, there appeared a negative line whose opening price was higher than the highest point on the first day;

3. The closing price of Yinxian on the second day is lower than that of Yangxian entity on the first day.

The cover of dark clouds is a sign of peaking, indicating that prices may fall back when they hit the top. We can make an initial empty order strategy and establish an empty position. In an upward trend, don't be confused by the big yang line of 1 day, but also observe whether the trend falls on the third day and determine the decline pattern.

One way to set a stop loss when a dark cloud covers the top is to set a stop loss order above the K-line high formed the next day.

In addition, we should not only be familiar with the K-line form, but also ignore the relevant strategies. It is the right way for K-line trading to pay attention to the overall technical research on the relationship between stop-loss order management and risk-return and improve the odds of trading.