The piercing pattern

Some candlestick price patterns are well known, like shooting stars, hammer reversal bars, and engulfing bars. However, some of the less well-known candlestick price patterns are worth noting when reading price charts. This is particularly helpful when you are managing a position on the longer-term charts. First, let’s look at the piercing pattern with an example of how this looks from Apple’s price charts.

The piercing pattern described

The piercing pattern is a candlestick pattern used in trading to show that a downtrend might be ending and the price could start going up. It has two candlesticks. It is particularly useful when assessing whether a downtrend is about to come to an end. The pattern is subtle and easily overlooked, so this is what to specifically look for. Note the gap that is needed for the second candlestick pattern.

  • Candlestick 1: The first candlestick in the pattern is a bearish candlestick, indicating selling pressure. It represents a continuation of the existing downtrend and opens near or above the previous candlestick’s close.

  • Candlestick 2: The second candlestick is a bullish candlestick, which opens lower than the previous candlestick’s close. Note: There is a price gap between the close of the first candlestick and the open of the second candlestick. Intraday, it would look like the bears are taking prices to even lower lows. However, the tide changes with the second candlestick.

  • Close of candlestick 2: The crucial aspect of the piercing pattern comes with the second candlestick, as it must close at least halfway into the real body of the first candlestick. In other words, the second candlestick’s closing price is significantly higher than the first candlestick’s midpoint.

The piercing pattern on the charts

Take a look here for a market example of what candlestick 1 and candlestick 2 from the Apple Weekly chart should look like.

Chart


Learn more about HYCM


Our products and commentary provides general advice that do not take into account your personal objectives, financial situation or needs. The content of this website must not be construed as personal advice.

Editors’ Picks

EUR/USD closes in on 1.1700 as US CPI data takes center stage

EUR/USD closes in on 1.1700 as US CPI data takes center stage

EUR/USD extends gains to near 1.1700 in the European session on Tuesday. The pair draws support from a broad US Dollar retreat as traders refrain from placing fresh bets on the Greenback ahead of the US CPI inflation data. Upbeat German ZEW Survey and Eurozone industrial data also aid the pair's uptick. 

GBP/USD recovers to 1.3450, awaits US CPI for fresh impetus

GBP/USD recovers to 1.3450, awaits US CPI for fresh impetus

GBP/USD is on a gradual recovery from three-week lows, testing 1.3450 in Tuesday's European trading. A cautiously optimistic market mood combined with a broadly weaker US Dollar underpins the pair ahead of the critical US CPI data and BoE Governor Bailey's speech. 

Japanese Yen hangs near multi-week low against USD as traders keenly await US CPI report

Japanese Yen hangs near multi-week low against USD as traders keenly await US CPI report

The Japanese Yen languishes near a three-week low against a softer US Dollar heading into the European session and seems vulnerable to prolonging the monthly downtrend. The growing market conviction that the BoJ will keep interest rates low for longer than it wants amid concerns about the economic fallout from higher US tariffs turns out to be a key factor undermining the JPY.


Editors’ Picks

EUR/USD closes in on 1.1700 as US CPI data takes center stage

EUR/USD closes in on 1.1700 as US CPI data takes center stage

EUR/USD extends gains to near 1.1700 in the European session on Tuesday. The pair draws support from a broad US Dollar retreat as traders refrain from placing fresh bets on the Greenback ahead of the US CPI inflation data. Upbeat German ZEW Survey and Eurozone industrial data also aid the pair's uptick. 

GBP/USD recovers to 1.3450, awaits US CPI for fresh impetus

GBP/USD recovers to 1.3450, awaits US CPI for fresh impetus

GBP/USD is on a gradual recovery from three-week lows, testing 1.3450 in Tuesday's European trading. A cautiously optimistic market mood combined with a broadly weaker US Dollar underpins the pair ahead of the critical US CPI data and BoE Governor Bailey's speech. 

Gold price retains its positive bias amid a broadly weaker USD; lacks bullish conviction

Gold price retains its positive bias amid a broadly weaker USD; lacks bullish conviction

Gold price trades with a mild positive for the second straight day on Thursday, though it lacks follow-through and remains below the $3,350 level through the early European session. Reports that US President Donald Trump was considering replacing Federal Reserve Chair Jerome Powell raised concerns over the future independence of the US central bank.

Bitcoin Cash targets 52-week high as on-chain data indicate room for growth

Bitcoin Cash targets 52-week high as on-chain data indicate room for growth

Bitcoin Cash (BCH) is trading in the green by 2% at press time on Thursday, following a 6.39% price surge on Wednesday. Rising in a parallel channel pattern, BCH shows signs of increasing bullish momentum and nearing the $500 psychological level.

Could Iran block the Strait of Hormuz? Why Oil is on edge after US strikes

Could Iran block the Strait of Hormuz? Why Oil is on edge after US strikes

As the Israel-Iran conflict reaches new heights, an old threat is coming back to haunt the markets: that of the closure of the Strait of Hormuz. This narrow arm of the sea in the Persian Gulf, wedged between Iran to the north and the United Arab Emirates and Oman to the south, is much more than a simple sea passage.

RECOMMENDED LESSONS

5 Forex News Events You Need To Know

In the fast moving world of currency markets where huge moves can seemingly come from nowhere, it is extremely important for new traders to learn about the various economic indicators and forex news events and releases that shape the markets. Indeed, quickly getting a handle on which data to look out for, what it means, and how to trade it can see new traders quickly become far more profitable and sets up the road to long term success.

Top 10 Chart Patterns Every Trader Should Know

Chart patterns are one of the most effective trading tools for a trader. They are pure price-action, and form on the basis of underlying buying and selling pressure. Chart patterns have a proven track-record, and traders use them to identify continuation or reversal signals, to open positions and identify price targets.

7 Ways to Avoid Forex Scams

The forex industry is recently seeing more and more scams. Here are 7 ways to avoid losing your money in such scams: Forex scams are becoming frequent. Michael Greenberg reports on luxurious expenses, including a submarine bought from the money taken from forex traders. Here’s another report of a forex fraud. So, how can we avoid falling in such forex scams?

What Are the 10 Fatal Mistakes Traders Make

Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. What is important to know that no matter how experienced you are, mistakes will be part of the trading process.

Strategy

Money Management

Psychology

Best Brokers of 2025