For a better understanding of this article, you should already know what Japanese Candlesticks are and all their features; for this reason, we suggest you to read this introductory article to Japanese Candlesticks: Japanese Candlestick Chart ( So that you can understand also the Ratings given to the Candlestick Patterns for the “quality” of the signal and for their frequency to “appear” on Charts).
Let’s analyse now the following Candlestick Pattern: “Piercing Line Pattern”.
Piercing Line Pattern
– Normally it should be a signal of Bullish reversal of the current Trend.
– It occurs during a Downtrend; confirmation is required by the candles that follow the Pattern.
– The First Candle is black.
– The Second Candle is white; it has the Close above the midpoint of the Real Body of the First Candle (And below the Open of the First Candle). Whereas it has the Open below the Low of the First Candle.