How far must the second candle close into the first?

By the usual definition, above the midpoint of the first candle’s body. The halfway line is a convention, not a law.

Is a piercing line a buy signal?

No. It describes what buyers and sellers did during those candles. Studies of candlestick patterns find that, taken alone, they predict the next move only a little better than chance, if at all. It is one observation to weigh with others.

Piercing line pattern: what it looks like and what it is taken to mean

The candles of the pattern are ringed. An invented chart, drawn to show the shape. Not market data.

Also searched aspiercing pattern · piercing candle · bullish piercing line

How to recognise a piercing line

A long falling candle, then a rising one.
The second opens lower than the first one’s low.
The second closes above the midpoint of the first body, but below its open. If it closed above the open it would be an engulfing pattern.

What it is taken to mean

It is read as sellers pushing the price to a new low and failing to keep it there, with buyers taking back more than half of the previous period’s fall. It is considered a weaker hint than a bullish engulfing pattern, which takes back all of it.

What traders check next

Whether there was a real fall before it. Without one there is nothing for it to turn.
Whether it formed at a level where the price has turned before.
The next candle: a close above the first candle’s open, or a return below the second candle’s low?

Where people go wrong

Looking for the gap in a market that rarely gaps. Currencies trade round the clock during the week, so one candle usually opens where the last closed, and the textbook shape is uncommon outside the weekend.
Accepting a close below the midpoint. That is a different, weaker shape.
Acting on the two candles alone, against a fall that is still orderly. Often the fall simply continues.

Questions people ask

How far must the second candle close into the first?: By the usual definition, above the midpoint of the first candle’s body. The halfway line is a convention, not a law.
Is a piercing line a buy signal?: No. It describes what buyers and sellers did during those candles. Studies of candlestick patterns find that, taken alone, they predict the next move only a little better than chance, if at all. It is one observation to weigh with others.

The words on this page

An explanation for study. It is not advice, a recommendation or a forecast, and a pattern or a situation described here says nothing certain about what a price will do next.

Where people go wrong

Looking for the gap in a market that rarely gaps. Currencies trade round the clock during the week, so one candle usually opens where the last closed, and the textbook shape is uncommon outside the weekend.
Accepting a close below the midpoint. That is a different, weaker shape.
Acting on the two candles alone, against a fall that is still orderly. Often the fall simply continues.

Questions people ask

How far must the second candle close into the first?: By the usual definition, above the midpoint of the first candle’s body. The halfway line is a convention, not a law.
Is a piercing line a buy signal?: No. It describes what buyers and sellers did during those candles. Studies of candlestick patterns find that, taken alone, they predict the next move only a little better than chance, if at all. It is one observation to weigh with others.