10 Minute Dark Cloud Cover

Table of Contents

Understanding the 10 Minute Dark Cloud Cover Alert

This alert signals the appearance of a dark cloud cover pattern on a traditional 10-minute candlestick chart. Components of a dark cloud cover pattern include:

  • The first candlestick is typically a green or bullish candlestick, indicating an upward price movement

  • The second candlestick is a red or bearish candlestick, indicating a downward price movement

  • The bearish candlestick "covers" or partially engulfs the body of the bullish candlestick, opening above the previous candle and closing below the midpoint of the previous bullish candle.

Here are some potential benefits and implications of using the Dark Cloud Cover alert:

Reversal Signal: The Dark Cloud Cover is a bearish reversal pattern. It occurs after an uptrend and suggests a potential shift in momentum from bullish to bearish.

Identification of Weakness: The pattern consists of two candlesticks – the first is a strong bullish candle, and the second opens higher but closes significantly lower, forming a dark cloud over the preceding candle. This indicates that the bulls lost control, and the bears gained strength.

Confirmation of Resistance: The dark cloud cover often forms near a resistance level, adding confirmation to the potential reversal. Traders may use this signal to assess the strength of resistance and make informed trading decisions.

Entry Signal for Short Positions: Traders may interpret the Dark Cloud Cover as a signal to enter short positions or consider closing long positions. This is based on the expectation of a downtrend following the bearish reversal pattern.

Risk Management: The pattern provides a clear point for placing a stop-loss order. Traders often set the stop-loss just above the high of the second candlestick in the pattern, helping manage potential losses if the reversal does not occur as anticipated.

Confirmation with Other Indicators: To increase the reliability of the alert, traders often use it in conjunction with other technical indicators, such as trendlines, support/resistance levels, or other candlestick patterns.

Adaptability to Different Timeframes: The Dark Cloud Cover alert is applicable across various timeframes, making it adaptable for different trading styles and time horizons.

Default Settings

By default, the 10 minute dark cloud cover alert triggers when this pattern appears on a 10-minute candlestick chart. To align with each alert, it's essential to utilize the corresponding time frame on the chart. For instance, this alert is visualized on the 10-minute candlestick chart.

Stock with 10 Minute Dark Cloud Cover

Scan with 10 Minute Dark Cloud Cover Alert

Custom Settings

For '10 Minute Dark Cloud Cover' alerts, you have the option to use an alert specific filter. This filter is located immediately to the right of the corresponding alert and is always optional. You can decide to leave it blank if you want to receive more alerts, or you can fill it in to restrict the number of alerts you receive. This filter allows you to specify the quality of the alert. When you set a higher number for this filter, you are telling the alerts server to display only alerts that meet a higher quality standard, resulting in fewer alerts being shown.

When setting an alert for '10 Minute Dark Cloud Cover', the user can filter these alerts by a grade of how on how closely the stock chart matches the ideal shape of the stock pattern. 0 would mean there was no match. 100 would mean it's an ideal match.

10 Minute Dark Cloud Cover Alert Custom Settings

Description Column

The description of the alert will display "Dark Cloud Cover", providing you with a clear indication of the specific alert that has been triggered.

10 Minute Dark Cloud Cover Description

Quality Column

The quality value on a scan using the "10 Minute Dark Cloud Cover" represents the grade based on how closely the stock chart matches the ideal shape of the stock pattern. 0% would mean that there was no match at all. Of course, if a stock pattern is this poor a match, then we are unlikely to report an alert. 100% would be an ideal match. Again, this would be an ideal and extreme case. Few if any alerts come close to 100%.

10 Minute Dark Cloud Cover Alert Quality

Alert Info for 10 Minute Dark Cloud Cover [DCC10]