Last few post I got feedback that people were enjoying the information on candlesticks.
If you missed the last three posts here are the links.
Back to Basics-Japanese Candlesticks
More on CandleSticks- Its Hammer Time
More Candlesticks- The Inverted Hammer
These are good articles with a video to help get us back to basics in identifying price action.
Ok here is the next one. The Engulfing candle.
This candle is maybe one of the most important if not the most important candlestick formation in Identifying price action and the next possible direction of a currency pair. Or any trading instrument for that matter.
lets get into this candle formation and what in means to traders.
Lets Define The Bullish Engulfing CandleStick First:
Now The opposite The Bearish Engulfing CandleStick:
The bearish engulfing signal is important to learn since it is one of the major candlestick patterns. This signal visually illustrates that there has been a dramatic change in investor sentiment. More specifically it conveys an extremely high probability that the buying is over and there may be an opportunity for establishing a good short position.
The bearish engulfing pattern is a major reversal pattern comprised of two opposite colored bodies. It is formed after an up-trend and it opens higher than the previous day’s close and closes lower than the previous day’s open. Therefore the black or red candle completely engulfs the previous day’s white or green candle. Engulfing can include either the open or the close and it must be equal to the open or close of the previous day, but not both.
Now that we have a basic definition lets watch a video with some examples and more information on identifing this Candlestick formation.
LEARN TO TRADE WITH THE PROS FOR $1 DOLLAR
Like it or share it. Good Luck Trading this week
If you missed the last three posts here are the links.
Back to Basics-Japanese Candlesticks
More on CandleSticks- Its Hammer Time
More Candlesticks- The Inverted Hammer
These are good articles with a video to help get us back to basics in identifying price action.
Ok here is the next one. The Engulfing candle.
This candle is maybe one of the most important if not the most important candlestick formation in Identifying price action and the next possible direction of a currency pair. Or any trading instrument for that matter.
lets get into this candle formation and what in means to traders.
They are most effective when founding the oversold area, at the end of a substantial downtrend or the overbought area for the Bearish pattern. The Bullish Engulfing pattern consists of two bodies. The first body is the same color as the current trend, the second is the opposite color. The signal day opens lower than the previous days close, then it trades higher so by the end of the day, it will close above the previous days open. This new white candle now engulfs the previous days candle, known as the DAKI, or the embracing line.
The bearish engulfing signal is important to learn since it is one of the major candlestick patterns. This signal visually illustrates that there has been a dramatic change in investor sentiment. More specifically it conveys an extremely high probability that the buying is over and there may be an opportunity for establishing a good short position.
The bearish engulfing pattern is a major reversal pattern comprised of two opposite colored bodies. It is formed after an up-trend and it opens higher than the previous day’s close and closes lower than the previous day’s open. Therefore the black or red candle completely engulfs the previous day’s white or green candle. Engulfing can include either the open or the close and it must be equal to the open or close of the previous day, but not both.
Now that we have a basic definition lets watch a video with some examples and more information on identifing this Candlestick formation.
LEARN TO TRADE WITH THE PROS FOR $1 DOLLAR
Like it or share it. Good Luck Trading this week
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