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The Piercing Line Indicator is designed to automatically analyze the chart and identify and plot Piercing Line patterns.
The Piercing Line pattern is one of the reversal patterns in technical analysis. It indicates the possibility of a price reversal in both bullish and bearish trends. This trading tool draws the bullish piercing pattern with a blue box and the bearish pattern with a pink box.
Piercing Line Indicator Specifications Table
The table below outlines the specifications of the Piercing Line indicator.
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Indicator Categories:
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Price Action MT4 Indicators
Chart & Classic MT4 Indicators
Candle Sticks MT4 Indicators
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Platforms:
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MetaTrader 4 Indicators
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Trading Skills:
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Elementary
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Indicator Types:
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Reversal MT4 Indicators
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Timeframe:
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Multi-Timeframe MT4 Indicators
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Trading Style:
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Day Trading MT4 Indicators
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Trading Instruments:
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Share Stocks MT4 Indicators
Cryptocurrency MT4 Indicators
Forex MT4 Indicators
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Bullish Piercing Pattern
Based on the 1-hour Bitcoin (BTC) chart, the first red candle represents selling pressure and the continuation of the bearish trend. However, immediately after that, the second bullish candle opens lower than the bearish candle. Open and close above the midpoint of the previous candle’s body.
Bearish Piercing Pattern
According to the 30-minute chart analysis of the AUD/USD currency pair, the bearish Piercing Line pattern appears after a bullish movement. In such cases, the bearish Piercing Line signals the potential end of the bullish trend and the beginning of a downtrend.
When this pattern forms near resistance zones or price peaks, it can act as a warning to exitbuy positions or entershort positions.
Piercing Line Indicator Settings
The image below relates to the settings panel of the Piercing Line indicator:
- Fast MA Period: Sets the period for the fast-moving average
- Slow MA Period: Sets the period for the slow-moving average
- Bearish Piercing Color: Select the color for the bearish piercing pattern box
- Bullish Piercing Color: Select the color for the bullish piercing pattern box
Conclusion
When it appears at the end of a downtrend or uptrend, the Piercing Line Indicator provides a meaningful signal of a potential market reversal.
Due to its simplicity and clarity, this indicator is an effective part of trading strategies in markets such as Forex market, Stocks, Cryptocurrencies, and Commodities.
Does the Piercing Line Indicator generate entry and exit signals?
No, this indicator only displays piercing patterns that signal potential trend reversals.
Can the Penetrating Line Indicator be used on daily timeframes?
Yes, this indicator can display patterns on a daily timeframe without any limitations.