Question: What is Piercing Line of Japanese Candlestick Chart on MT4? What does it indicate?
During the course of a decline, a long white candlestick exceeds the midpoint of the previous long black candle. The white candle opens below the previous close or low.
Traders open short positions in the direction of the descent, as it remains intact.
The opening of the next session, confirms the bears’ intentions, as the new candlestick gaps lower (either the close or the low price).
Bears go with the direction of the downward move but the bulls find prices attractive – entering the market aggressively with long positions.
The session closes with gains for the bulls who managed to close the long white candle, well into the previous candle’s body.
| Supply/Demand | Demand is greater than supply. |
|---|---|
| Sentiment | Positive. |
| Direction | Bullish reversal. |
| Trigger | Consider buying if the next candlestick exceeds the high of the long black candlestick. |
