Large range candles are a fantastic way to enter supply and demand zone trades when traditional signals (like pin bars and engulfing patterns) are absent. However, they aren’t the only weapon in your arsenal.

Let’s talk about another entry pattern:

The Deep Dark Cloud Cover and Piercing Patterns.

Now, you might be thinking:

“I’ve heard of dark cloud cover and piercing patterns before.”

Yes, these patterns are well-known in forex, often mentioned on price action websites or in candlestick trading books. But here’s the difference:

We’re not trading the standard versions of these patterns here.

We’re using the “Deep” variations.

These advanced patterns form differently than their traditional counterparts. These are two-candle reversal patterns, similar to bullish and bearish engulfing patterns. They occur when price almost engulfs the prior candle but stops just short, closing deep within the candle body.

The second candle closes much deeper into the first, hence the name “Deep.”

This subtle difference almost turns them into Engulfing Candles, which makes them important signals for identifying when the banks are stepping into the market at supply and demand zones.

Let’s see how these patterns work.

The Deep Dark Cloud Cover

This is the bearish version of the pattern, perfect for trading supply zones.

The first candle is a large bullish candle, signaling strong upward momentum.

The second candle opens at a similar price to the bullish candles close but terminates deeply into the first, forming a pattern but falling just short of actually becoming a bearish engulfing.

What It Tells Us: The Deep Dark Cloud Cover reveals institutions have entered sell positions. The deep penetration into the first candle indicates they are selling heavily into the buying frenzy, preparing for a possible reversal, and indicating price may soon reverse from the supply zone.

Key Characteristics:

The Piercing Pattern

This is the bullish counterpart of the deep dark cloud cover and is used for trading demand zones.

The first candle is a large bearish candle, showing strong downward pressure.

The second candle opens at the bearish candles close but finishes deep into the first, almost forming a bullish engulfing pattern but stopping just short.

What It Tells Us: The piercing pattern signals that banks and institutions have potentially entered large buy positions. The deep move into the first candle’s body shows they are buying heavily into the current selling pressure, setting the stage for a reversal higher from the demand zone.

Key Characteristics:

Example: Trading a Piercing Pattern in a Demand Zone

Let’s look at a demand zone on EUR/USD:

Price enters the zone, but no clear entry signals appear at first — no large pin bars or engulfing patterns worth trading.

Then, a Piercing Pattern forms:

• The first candle is a large bearish candle as price drops into the zone.
• The second candle opens lower but reverses sharply, closing deep into the first candle’s body.

The Piercing Pattern signals that institutions have entered large buy positions, as someone is clearly buying into heavy selling pressure.

Here’s how to trade it:

1. Enter a long trade once the second candle closes.
2. Place your stop loss just below the demand zone.
3. Take profits as price rises out of the zone.

Why These Patterns Make Great Backup Entry Signals

Deep dark cloud cover and piercing patterns are unique because they provide a clear confirmation of institutional activity.

Unlike standard candlestick patterns, their deep penetration into the first candle’s body shows that banks and institutions are actively entering the market, making them highly reliable for entering supply and demand zone trades.

Even if other signals like pin bars or engulfing patterns are present, these patterns can serve as additional confirmation.