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Engulfing Candle

How to Spot and Trade the ENGULFING CANDLE Hey traders, In this post, we will discuss a classic candlestick pattern formation each trader must know - the engulfing candle. Key properties of this pattern: 🔑 Engulfing candle is a reversal pattern. 🔑 Engulfing candle can be bullish or bearish. ❗️Also, remember that this candle demonstrates the highest accuracy when it is formed on a key level (support or resistance). ⬆️Bullish Engulfing Candle usually forms after a strong bearish impulse. Weakening, the market keeps going lower forming bearish candles. However, at some moment, instead of forming a new bearish candle the market reverses. The price forms a bullish candle that engulfs the range of the previous bearish candle and closes above its opening price. Such a candle we call a bullish engulfing candle. The main feature of this pattern is the fact that its total range (distance from the wick high to wick low) & body range (distance from body open to body close) exceed the ranges of a previous bearish candle. Being formed on a key support level or within a demand zone it signifies a highly probable pullback or even a trend reversal. ⬇️Bearish Engulfing Candle usually forms after a strong bullish move. Reaching an overbought condition, the market keeps going higher forming bullish candles. However, at some moment, instead of forming a new bullish candle the market goes in the opposite direction. The price forms a bearish candle that engulfs the range of the previous bullish candle and closes below its opening price. Such a candle we call a bearish engulfing candle. The main feature of this pattern is the fact that its total range (distance from the wick high to wick low) & body range (distance from body open to body close) exceed the ranges of a previous bullish candle. Being formed on a key resistance level or within a supply zone it signifies a highly probable pullback or even a trend reversal. Take a look how powerful the engulfing candle is: on Gold chart, 4H time frame, the price formed a bullish engulfing candle after a pullback. The formation of the pattern immediately triggered a bullish continuation. At some moment, the market became overbought, the formation of a bearish engulfing candle confirmed the initiation of a bearish movement and the market dropped heavily then. 📝Engulfing candle can be applied for scalping lower time frames, for intraday trading, or even for swing trading. Personally, I apply this candle on daily/4h time frames as one of the confirmations of the strength of the structure level that I spotted. Let me know, traders, what do you want to learn in the next educational post?
OANDA:XAUUSDEducation
by VasilyTrader
10
Mastering Engulfing Candle Trading 📚Engulfing candles are an essential feature of technical analysis in forex trading. An engulfing pattern happens when a larger candle engulfs the entire body of the previous candle, signaling a potential reversal of the current trend. Engulfing candles, which can be either bullish or bearish, are trusted by many traders for their reliability in predicting future price movements. However, to become an expert in engulfing candle trading, one needs to learn how to identify the best ones and leverage their body size effectively. In this article, we will look at the crucial steps to master this trading strategy. 🔎Identifying the Best Engulfing Candles One of the key aspects of trading using engulfing candles is knowing how to spot the strongest signals. The best engulfing candles should be resistant to the noise and inconsistent movements that can often occur in the forex market. The first step towards identifying the best engulfing candles is to focus on the size of the preceding candles. Candles with small bodies and long wicks produce too much noise and can lead to false signals. Instead, seek engulfing candles that develop after a significant price move, ideally with a larger body and shorter wick. Higher timeframe charts - like the 4-hour and daily - offer better accuracy in identifying reliable engulfing patterns. 💪Leveraging Body Size for More Efficient Trading The size of an engulfing candle’s body plays a crucial role in determining the strength of a trend. A larger body indicates more significant price movement and more active participation from traders. The size of the engulfing candle can also help ascertain the potential strength of the new trend. Bigger body sizes usually signal a stronger trend, whereas smaller bodies usually represent a more moderate price move. Traders can leverage body size to adjust their trading strategy – for instance, employing wider stop losses for more significant movements or using tighter take profit targets for moderate trends. I have collected couple of good engulfing candles that we were trading with our team. Take a closer look at their body sizes and the previous candles. Such candles alone can provide fantastics trading opportunities. 🔔Conclusion Engulfing candles are an essential tool in forex trading, and their size can significantly help traders identify the best entry signals. Traders who master engulfing candle trading can develop a more accurate technical analysis strategy that yields high returns. By continually analyzing candlestick patterns and using other technical analysis tools, traders can build robust investment strategies that enable them to become profitable forex traders. What do you want to learn in the next post?
TVC:GOLDEducation
by UnitedSignals
9
CADJPY BEARISH THU 6 Jul 2023 (education)The price is ranging structure in monthly and daily timeframes the price hits the upper range and reject with engulfing candles at the supply zone in daily timeframes The set up is simple. Engulfing breakout of range at the supply zone after price been ranging for a while. The risk reward ratio is 5 the stoploss level is above supply zone the target is the double bottom that cause price go went up I risk 0.10% of entire portfolio on this trade.
Short
by kennkennntl
Gold 1D Analysis , Bears comingHello friends. I saw a three top pattern in 1D chart and a bearish divergence included too. after the 3rd time price touch 2050 Resistance level , we can see in picture below , Buyers couldnt lead price upper and Sellers came in strongly. So , as you can see in Zoomed Chart , we have a Bearish Engulfing pattern there and in the main chart , we see a decrease in RSI tops but 3 tops placed in a line. this means the Trend will weak and the price will Drop. I think our Swing targets are 1958 (Former Bottom) and 1933(EMA 50). Thank you for reading my IDEA. PLZ share me your opinion. Have good trades. <<< LEARN first , then Omit L & EARN >>>
GShort
by TraderAmin-KZ
6
USDJPY high around 143.800The dollar has been in a weak uptrend for the past few hours so I decided to take advantage of some indecision at a high. Price presented a shooting star on the 30minute chart as well as a strong bearish engulfing on the 5min at the exact area needed for a short. This area is exactly where price closed at then was immediately rejected on last Friday (6/23). This retest could be early considering NY session is hours away. Also the lower timeframes haven't began creating lower low yet.
Short
by DesharedPierreJr.
usdjpy is throwing bearish reversal signalsThe dollar has been very strong versus the Yen lately. Price has reached yet another high and i believe its like to retrace bearish. The sellers have stepped in a provided some indecision and buy exhaustion. The blue 8 exponential moving average crossed to the dowside below the 21 simple moving average and price began a minor downtrend. This usually occurs before a breakout and upon a retest of that bearish candle that initiated the downward movement. I'm awaiting a re-test of $13.868- $144.155 so signal if price would like to continue bullish intraday or retrace bearish and sell for lower lows now.
Short
by DesharedPierreJr.
🚀USDCAD double bottom: bulls ready to charge📈Brace yourself for a game-changing setup on the USDCAD forex pair! 🌟 The charts are showing a compelling buy signal in the 4-hour timeframe, with price bouncing off a solid support level at 1.31400. But that's not all! The candlestick pattern has revealed a powerful bullish engulfing formation, signaling a potential trend reversal in the making. Get ready to set your sights on multiple take profit levels: first target at 1.31950, representing the 0.618 Fibonacci retracement. Then, the neckline at 1.32200 beckons as our second milestone, followed by the third take profit around 1.32500, and ultimately, the grand target at 1.32800! Adding fuel to the fire, the MACD indicator is on the verge of forming a bullish crossover, adding further confirmation to this exciting setup. Don't miss out on this potentially explosive trade opportunity! 🚀 Respect money management don't forget to press the like button if you think this insight was helpful🚀
Long
by Thomas_Zito
1
USDJPY retracement at the highAfter a few indecision candles at the high, followed buy a volume push up to a major resistance, I became alert that a bearish setup might present. Friday closed off with a variation of a bearish engulfing. When price closes beyond a price then closes right back beneath it its a sign that this price is being rejected. Naked analysis tells us that the 1hour chat has already began its downward momentum. A minor double top formed. My short entry was based on the high volume bearish engulfing re-test at the neckline. The 30MIN chart has begun creating its lower highs and lower lows. This is a short scalp. the buy will likely present later in the week.
Short
by DesharedPierreJr.
1
EURUSD to make its 4H higher highI believe the daily momentum for this pair is still bullish. The 4H retraced to the 38.2% fib and presented a Volume bullish engulfing on top of a trendline . While I do believe the Euro is getting weaker, one more higher high or bullish push would make perfect sense considering the fact that its beneath a major resistance and had been rejected there prior. Its approaching an untested breakout zone while these daily candles aren't very strong.
Long
by DesharedPierreJr.
USDJPY rejected at 4H Lower HighI decided to short UJ here as the 4H shooting star at a re-tested area was a bearish enough signal for me to go short. Price has been making Lower Highs on 4H and daily chart. The bullish candles have been forming with a lot of indecision. This entry was taken based on the 4H close, as well as the 1H presenting a strong evening star at a Evening star re-test. My entry was upon a bearish 15min engulfing at a potential high/re-test of resistance. My stop loss is just Above the high of the shooting star. My target is the next daily Lower Low.
Short
by DesharedPierreJr.
2
EURAUD 4Hrs Trend channel +190 PIPTimeframe: 4 Hours Long Day Trading Position Initial Take Profit : 1.6183 to the channel middle point 2nd TP: 1.6238 (to the high volume node of the volume profile) SL: 1.593 (breaking the trend channel) The pair is in a bearish tunnel for more than a month, and now in the trend channel's bottom, and has a high potential to go up again during the next few days↑. ↝✔ Esteem your Analysis and seek improvements ⌁ @AbdullahTech ♾✽ June23 ↝✔ Keep an eye on the next price journey ;)
Long
by AbdullahTech
TAP - start of bullish trend?TAP bottomed in Sept 2020 and began to move higher till 7 Jun2021, after which it made no further progress and pretty much churned sideways in a wide range for the next 11 months. Finally, on 2nd May this year, it began to propel strongly above the neckline due to positive earnings surprise. However, it then began to pullback over the following few weeks, all the way close to the neckline before staging a strong rebound. This is a classic breakup and retest that affirms that the neckline (formerly a strong resistence) is now the new "support". The stock appears to be poised to began an uptrend that could last a while. The next strong resistence could be around $75. However, it is just a level to look out for and nothing is cast in stone. Trade management (which varies according to one's trading style and temperament) is required to see how far one is able to ride a trend. Disclaimer: Just my 2 cents and not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Take care and Good Luck!
NYSE:TAPLong
by Juliac
Gold prepared for another bearish tumbleGold has retraced to the neckline of the double top pattern, upon which it provided a strong bearish engulfing. The weekly resistance has failed to be completely broken in addition to a rejection of the 38% fib. The 4H is trading within a range creating a new lower low along with ADX. The moving average is crossing to the downside as well as a trendline break to the downside. Price is now on the short side of the trendline. I will look for shorts near the weekly resistance for a 4H lower high. or a complete retest of the major 38% where the daily was rejected. Targets for shorts are -27%. extended target at -61%.
OANDA:XAUUSDShort
by DesharedPierreJr.
Kraft Heinz: Head and Shoulders Bearish MACD CrossingKHC has been trading up within this range since the 2020 mania brought it here and I've been waiting for it to form this tentative right shoulder and as of right now after it's given us a Monthly Bearish Engulfing at the 55-Week EMA and the MACD has officially given us yet another level of Bearish Convergence I think we can safely say this looks quite bearish and is likely to go down to make some retraces. One other thing to note is that in recent years, KHC has been selling off all of their brands to other big Food Companies, with the most recent one that comes to mind being the selling of Planters to Hormel Foods for 3.3 Billion Dollars and Cracker Barrel to Lactalis for 3.2 Billion Dollars; Which raises the question as to why KHC feels the need to sell of so many of its well known assets if they aren't currently in a position where their stock price may be considered overvalued?
NASDAQ:KHCShort
by RizeSenpai
RADICO - Bullish Engulfing Swing ReversalNSE: RADICO is closing with a bullish engulfing candle supported with volumes. Today's volumes and candlestick formation indicates strong demand and stock should move to previous swing highs in the coming days. The stock has been moving along the horizontal support for the past few days which is indicating demand. One can look for a 8% to 11% gain on deployed capital in this swing trade. The view is to be discarded in the event of the stock breaking previous swing low. #NSEindia #Trading #StockMarketindia #Tradingview #SwingTrade Disclaimer: This is for educational purposes only.
NSE:RADICOLong
by BrahmaBull31