The Dark Cloud Cover is a bearish candlestick pattern that helps forex traders anticipate potential trend reversals, especially after an uptrend. It forms over two candles. The first is a strong bullish candle, showing continued buying pressure. The second opens above the previous candle’s high but then closes well into the body of the first candle, signalling a sudden shift in market sentiment from buyers to sellers.

In forex trading, this pattern helps traders identify weakening bullish momentum. When price fails to sustain higher levels, and sellers push it down sharply, it suggests that buyers are losing control. This early warning allows traders to prepare for possible downside moves, tighten stop-loss levels, or look for short-selling opportunities.

The Dark Cloud Cover is particularly useful when it appears near key resistance zones, Fibonacci levels, or after extended rallies. Its reliability increases when confirmed by other indicators such as RSI divergence, declining volume, or a break below short-term support. Traders often wait for confirmation from the next candle before entering a trade to reduce false signals.

Overall, the Dark Cloud Cover helps forex traders manage risk by highlighting potential trend exhaustion. Rather than reacting late to a reversal, traders can use this pattern to make more informed decisions, improve timing, and align trades with emerging bearish momentum in the market.