This pattern appears at the end of a bearish cycle, consisting of bearish candle 1 and bullish candle 2. Bullish candle 2 closes 50% higher than the body of candle 1.
Candle 3 is a confirmation candle. There are 2 cases below :
• If candle 3 is a green candle (bullish candle), we will execute a BUY order on the next 4 candle.
• If candle number 3 is a red candle (bearish candle), we will stay out of the market.
Candle 4 is the entry candle. We enter an order at the beginning of candle 4, at the end of candle 4, exit the order. In this Piercing pattern, we execute a BUY order when candle number 4 opens, we close a BUY order when candle number 4 closes.