Dark Cloud Cover Pattern

Dark Cloud Cover is one of the commonly used candlestick patterns in quantitative trading, representing a bearish reversal pattern.

Calculation Principle

Dark Cloud Cover pattern is identified by the following conditions:

1. First day: A bullish candle
2. Second day: A bearish candle
3. Second day opens above the first day's high
4. Second day closes below the midpoint of the first day's body
5. Pattern appears at the top of an uptrend

Parameter Description

• Input Parameters:
  • Open: Opening price
  • High: Highest price
  • Low: Lowest price
  • Close: Closing price
• Parameters:
  • penetration: Ratio of body to shadow (default: 0)

Usage Recommendations

1. Use in combination with other technical indicators
2. Pay attention to the overall market trend
3. Monitor volume confirmation
4. Set reasonable stop-loss levels
5. Watch for false breakouts

Notes

• Ensure data quality
• Pay attention to pattern completeness
• Consider market environment
• Watch for false signals
• Combine with fundamental analysis
• Pay attention to risk control
• Regularly evaluate strategy effectiveness
• Optimize parameters