Wysetrade
This video explains an effective trading strategy using engulfing Candlestick patterns and provides tips on identifying bullish and bearish momentum.
Insanely Effective Engulfing Candlestick Pattern Trading Strategy: A Comprehensive Guide
Introduction:
Welcome back to another episode! In this video, we will be discussing an insanely effective engulfing Candlestick pattern trading strategy. Many traders use this pattern, but most actually use it incorrectly. We will also introduce a series of Premium trading guides that work in combination with this video. But before we dive into the details, please hit the like button to support our team and allow us to continue producing free content on YouTube.
Table of Contents:
1. Understanding the Bullish Engulfing Candlestick Pattern
2. Realistic Bullish Engulfing Candlestick Pattern
3. Importance of Candle Size in Bullish Engulfing Pattern
4. Trading Reversals with Bullish Engulfing Candlestick Pattern
5. Trading Trend Continuations with Bullish Engulfing Candlestick Pattern
6. Bullish Engulfing Momentum Candlestick Pattern
7. Understanding the Bearish Engulfing Candlestick Pattern
8. Realistic Bearish Engulfing Candlestick Pattern
9. Importance of Candle Size in Bearish Engulfing Pattern
10. Trading Reversals with Bearish Engulfing Candlestick Pattern
11. Trading Trend Continuations with Bearish Engulfing Candlestick Pattern
12. Bearish Engulfing Momentum Candlestick Pattern
13. Combining Candlestick Patterns with Price Action Techniques
14. Strategy 1: Identifying a Trade Setup followed by Engulfing Candle Confirmation
15. Strategy 2: Reversal Point and Swing High Confirmation
16. Strategy 3: Intraday Trend Change Confirmation
17. Strategy 4: Long Wick Candle Formation Confirmation
18. Strategy 5: Bearish Engulfing Candle Confirmation
Section 1: Understanding the Bullish Engulfing Candlestick Pattern
The bullish engulfing candlestick pattern is the traditional way to identify the pattern. It consists of a red candle followed by a larger green candle that gaps down, where the open and close of the red candle fit inside the open and close of the green candle. However, in the real market, gaps down are not common, so a more realistic bullish engulfing candlestick pattern is discussed.
Section 2: Realistic Bullish Engulfing Candlestick Pattern
In this section, we explain a more realistic bullish engulfing candlestick pattern, where the green candle opens at the close of the red candle but still engulfs it in terms of body size. This pattern also indicates bullish momentum and is used to take long entries.
Section 3: Importance of Candle Size in Bullish Engulfing Pattern
We highlight the significance of the size of the green engulfing candle in determining the quality of the long trade setup. A larger green engulfing candle indicates more buying presence and bullish momentum, often leading to even further upward movement and larger profits.
Section 4: Trading Reversals with Bullish Engulfing Candlestick Pattern
Using charts, we demonstrate how the bullish engulfing candlestick pattern can be used to trade reversals. We identify a moving downtrend and a subsequent formation of a big green engulfing candle, which triggers a reversal upwards and presents long trade opportunities along the way.
Section 5: Trading Trend Continuations with Bullish Engulfing Candlestick Pattern
In this section, we discuss how the bullish engulfing candlestick pattern can be used to trade trend continuations. We identify a moving uptrend and a pullback, followed by the formation of a big green engulfing candle, which signals new buying presence and presents more long trade opportunities as the trend continues upwards.
Section 6: Bullish Engulfing Momentum Candlestick Pattern
We introduce the bullish engulfing momentum candlestick pattern, which is similar to the traditional engulfing candle but with larger candles. This pattern indicates a heavy gain in bullish momentum and buying presence, resulting in more profitable long trades.
Section 7: Understanding the Bearish Engulfing Candlestick Pattern
The bearish engulfing candlestick pattern is the traditional way to identify the pattern. It consists of a green candle followed by a larger red candle that gaps up, where the open and close of the green candle fit inside the open and close of the red candle. However, in the real market, gaps up are not common, so a more realistic bearish engulfing candlestick pattern is discussed.
Section 8: Realistic Bearish Engulfing Candlestick Pattern
In this section, we explain a more realistic bearish engulfing candlestick pattern, where the red candle opens at the close of the green candle but still engulfs it in terms of body size. This pattern also indicates bearish momentum and is used to take short entries.
Section 9: Importance of Candle Size in Bearish Engulfing Pattern
Similar to the bullish engulfing pattern, we emphasize the importance of the size of the red engulfing candle in determining the quality of the short trade setup. A larger red engulfing candle indicates more selling presence and bearish momentum, often leading to even further downward movement and larger profits.
Section 10: Trading Reversals with Bearish Engulfing Candlestick Pattern
Using charts, we demonstrate how the bearish engulfing candlestick pattern can be used to trade reversals. We identify a moving uptrend and a subsequent formation of a big red engulfing candle, which triggers a reversal downwards and presents short trade opportunities along the way.
Section 11: Trading Trend Continuations with Bearish Engulfing Candlestick Pattern
In this section, we discuss how the bearish engulfing candlestick pattern can be used to trade trend continuations. We identify a moving downtrend and a pullback, followed by the formation of a big red engulfing candle, which signals new selling presence and presents more short trade opportunities as the trend continues downwards.
Section 12: Bearish Engulfing Momentum Candlestick Pattern
Similar to the bullish engulfing momentum candlestick pattern, we introduce the bearish engulfing momentum candlestick pattern. This pattern indicates a heavy gain in bearish momentum and selling presence, resulting in more profitable short trades.
Section 13: Combining Candlestick Patterns with Price Action Techniques
We highlight the importance of combining candlestick patterns with key price action techniques to avoid fake-out trade signals. Relying solely on candlestick patterns can be misleading, so we must incorporate other elements to improve our trading strategy.
Section 14-18: Five Strategies Using the Engulfing Candlestick Pattern
In these sections, we present five different strategies using the engulfing candlestick pattern. Each strategy focuses on specific trade setups and confirmation techniques, ensuring higher quality trade entries and minimizing false signals.
Conclusion:
In conclusion, the engulfing candlestick pattern is a powerful tool in identifying potential trade setups and confirming trend reversals or continuations. By understanding both the bullish and bearish variations of the pattern, traders can effectively capitalize on market movements. However, it is crucial to combine candlestick patterns with key price action techniques for a more comprehensive trading strategy.
