Engulfing Candle Trading Strategy
Download as PPTX, PDF1 like6,788 views
The document outlines a trading strategy using engulfing candles, which signal potential reversals in forex markets. It details how to identify bullish and bearish engulfing candles, including entry and stop-loss points, and emphasizes the importance of the time frame in trading decisions. Additionally, it suggests a risk-reward ratio and profit-taking strategies for traders using this method.
Engulfing Candle Trading Strategy
- 1. Engulfing Candle Trading Strategy Engulfing Candles, due to their distinct characteristics, provide potential reversal signals for Forex traders Here’s how to spot and trade them...
- 2. Open at or below the previous close Close at or above the previous open Close preferably near the high Bearish Candle Down Trend 1 2 Bullish Candle 4 3 5 6 Bullish Engulfing Candle 1 2 3 4 5 6 = Buyers Are In Control!+ + + + +
- 3. Open at or above the previous close Close at or below the previous open Close preferably near the low Bullish Candle Up Trend 1 2 Bearish Candle 4 3 5 6 1 2 3 4 5 6 = Sellers Are In Control!+ + + + + Bearish Engulfing Candle
- 4. ENTRY ENTRY STOP STOP Bullish Engulfing Candle Bearish Engulfing Candle Engulfing Candle Entry & Stop Bullish And Bearish
- 5. ENTRY: Above the high of the Bullish Engulfing candle STOP: Below the low of the Bullish Engulfing candle Reverse Rules For Bearish Engulfing TARGET: 1:1 Risk:Reward or higher At a minimum take half profits at 1:1 and move Stop to break even for the remainder Engulfing Candle Trading Plan
- 6. Produced by Bear in mind, the higher the time frame the stronger the signal This means give pay much more attention to an engulfing on the Weekly time frame than on, for example, the 1 Hour time frame The PAST MT4 Indicator available at Forex Useful automatically identifies Engulfing candles Engulfing Candle Trading Strategy