There are two types of engulfing bullish engulfing IE, which is a sign of the end of the boom down and turned into a rising trend, as well as bearish candlestick, which is a sign of the end of the trend rising.
This pattern is more easily seen than the other patterns formed by the candlestick. But the thing to watch out for include:
Long bullish candlestick bearish candlestick > long before.
Price high bullish candlestick > high price bearish candlestick before.
Prices close bullish candlestick > high price bearish candlestick before (not a requirement).
Long bearish candlestick > long bullish candlestick before.
Low price bearish candlestick bullish candlestick low price Close price bearish candlestick bullish candlestick low price Bullish engulfing pattern of transactions using the pending order is as follows:
-Place the pending order buy stop at the highest price the bullish engulfing.
-Stop loss placed at the lowest prices the bullish engulfing.
-Take profit was placed at the nearest resistance.
Bearish engulfing pattern of transactions using the pending order is as follows:
-Place the pending order sell stop at lowest price bearish engulfing.
-Stop loss placed at the highest price bearish engulfing.
-Take profit was placed at the nearest support.
They can be seen with the help of test history (strategy tester) by using the daily time frame on the currency EUR/USD.
Through the above picture, we can see this pattern was able to produce a difference in the profit and loss can recoup. Therefore it can be concluded that:
1. simple trading strategies with the engulfing pattern does not need additional other indicators.
2. the Engulfing pattern capable of detecting a pattern of reversal, as well as risk limitation quite clearly.
3. the resulting Profit is relatively stable.
4. This pattern often consisting of identification throughout the timeframe.