This Engulfing Candlestick Pattern Prints You Money (be very careful…)

hey guys welcome back to another episode in this video we're going to show you our insanely effective engulfing Candlestick pattern trading strategy many Traders use the engulfing Candlestick pattern but most actually use it incorrectly there is also a series of Premium trading guides that work in combination with this video we'll show you how to get these later on as always please hit the like button as it allows for our team to continue to produce more free content on YouTube so here's exactly what we'll be covering in this video starting with the first the bullish engulfing Candlestick pattern this is the traditional way to identify the pattern you have a red candle first followed by a bigger body green candle that gaps down the open and close of the red candle fits inside the open and close of the green candle this gives you your bullish engulfing Candlestick pattern because the green candle engulfs the entire red candle now here's the thing in the real day-to-day Market most of the time you won't get the gap down occurring so here's a more realistic bullish engulfing candle to look for you have a red candle first followed by a green candle that opens at the close of the red candle the overall body of the green candle is bigger than the red candle now just like before the red candle open and close still fits inside of the opening close of the bigger green candle making this still a bullish engulfing Candlestick pattern and signals bullish momentum buying presence and is used to take long entries now here's a bonus point the bigger the green engulfing candle is the higher the quality of the long trade setup as it signals even more buying presence and even more bullish momentum which often leads to trades that go even further upwards which results in even larger profits let's show this right on the charts you can use the bullish engulfing candle to trade reversals you have a moving downtrend a big green bullish engulfing candle forms which triggers a reversal upwards and presented long trade opportunities along the way up you can also use the bullish engulfing candle to trade Trend continuations you have a moving uptrend price then starts to pull back before a big green bullish engulfing candle forms which signals new buying presence has entered the market and presented more long trade opportunities as the trend continued upwards now there is a variant of the bullish engulfing candle which we call a bullish engulfing momentum Candlestick pattern the bullish engulfing momentum candle is just like a traditional engulfing candle except the previous candles open and close doesn't have to be inside of the open and close of the green engulfing candle the green candle needs to be significantly larger than the previous candle or previous candles we call it a bullish engulfing momentum candle because due to its larger size the distance traveled is a lot greater which signals a heavy gain in bullish momentum a heavy gain in buying presence and can result in larger more profitable long trades now on the charts you have a moving downtrend before a big green bullish engulfing momentum candle forms notice how it is significantly larger than many of the previous candles which shows a sudden spike in heavy buying presence signals heavy bullish momentum triggered a reversal upwards and presented long trade opportunities along the way up now going in the opposite direction a bearish engulfing Candlestick pattern this is the traditional way to identify the pattern you have a green candle first followed by a bigger body red candle that gaps up the open and close of the green candle fits inside of the open and close of the red candle this gives you your bearish engulfing Candlestick pattern because the red candle engulfs the entire green candle again in the real day-to-day Market most of the time you won't get the Gap up occurring so here's a more realistic bearish engulfing candle to look for do you have a green candle first followed by a red candle that opens at the close of the green candle the overall body of the red candle is bigger than the green candle now just like before your green candle open and close still fits inside of the open and close of the bigger red candle making this still a bearish engulfing Candlestick pattern and signals bearish momentum selling presence and is used to take short entries again here's a bonus point the bigger the red engulfing candle is the higher the quality of the short trade setup as it signals even more selling presents and even more bearish momentum which often leads to trades that go even further downward words and results in even larger profits let's show this right on the charts you can use the bearish engulfing candle to trade reversals you have a moving uptrend a big red bearish engulfing candle forms which triggers a reversal downwards and presented short trade opportunities along the way down you can also use the bearish engulfing candle to trade Trend continuations you have a moving downtrend price then starts to pull back before a big red bearish engulfing candle forms which signals new selling presence has entered the market and presented more short trade opportunities as the trend continued downwards now there is a variant of the bearish engulfing candle which is a bearish engulfing momentum Candlestick pattern your bearish engulfing momentum candle is just like a traditional engulfing candle except the previous candles open and close doesn't have to be inside of the open and close of the red engulfing candle the red candle needs to be significantly larger than the previous candle or previous candles we call it a bearish engulfing momentum candle because due to its larger size the distance traveled is a lot greater which signals a heavy gain in bearish momentum a heavy gain in selling presence and can result in larger more profitable short trades now on the charts you have a moving uptrend before a big red engulfing momentum candle forms notice how it is significantly larger than the previous candle this signals heavy selling presence heavy bearish momentum triggered a reversal downwards and presented short trade opportunities along the way down let's show one more you have a moving uptrend before a big red bearish engulfing momentum candle forms notice how it is significantly larger than many of the previous candles again this signals a sudden spike in heavy selling presence signals heavy bearish momentum triggered a reversal downwards and presented short trade opportunities along the way down now what we've covered so far is just the basics and as a member of this channel you should know that just using candles on their own isn't enough as it can lead to a lot of fake out trade signals we always need to combine Candlestick patterns with key price action techniques so here are the five strategies we're going to cover using the engulfing Candlestick pattern starting with strategy number one which is identifying a trade setup followed by an engulfing candle confirmation this reversal Point here gives you your key resistance level as price comes back up to the level you add an inverted longwick candle which shows a reaction to the level a reaction does not equal a trade as price can stall at the key level and still break right through and continue upwards as you are in a strong moving uptrend you then wait and see if you get Trend change price action which you had through the bearish engulfing candle that is also a candle color change all which shows momentum loss from the buyers profit taking and selling presence you would then look for a short trade setup once you had an intraday Trend change confirmation that show us again this reversal Point here gives you your key resistance level that is also a swing High making it an even higher quality level once price comes back up to the level you add a long Wick candle form which presented a short trade opportunity once you had the bearish engulfing candle confirmation that is also a candle color change you would look for short trade setups this reversal Point here gives you your key support level as price comes back down to the level you win a long wait candle form which presented a long trade opportunity now the next candle was not a bullish engulfing candle so no long trade entry and you keep waiting and seeing if one comes finally here you get your bullish engulfing candle and it's then when you would look for long trade entries this reversal Point here gives you your key resistance level as price comes back up to the level you add a long Wick candle form which presented a short trade opportunity now the next Scandal was not a bearish engulfing candle so no short trade entry and you would keep waiting and seeing if one comes finally here you get your bearish engulfing candle and it's then when you would look for short trade entries so moving on to strategy number two which is price entering a wide Zone identifying a trade setup followed by an engulfing candle confirmation before we continue we want to hear from you tell us in the comments below right now what video topics we should cover next [Music] as always please hit the like button as it allows for our team to continue to produce more free videos on YouTube these reversal points here are in the same general area but not close enough together this means you cannot draw a slim level but have to draw a wide Zone to Encompass the entire area price then enters the wide Zone and you add two long wick candles form and react to the Zone presenting a long trade opportunity to confirm this long trade setup inside of the white zone is valid you wait and see if you get Trend change price action which you got through the bullish engulfing momentum candle that formed and that exited the Zone which is then when you would look for long entry points let's show this again this is the dollar CAD currency pair these reversal points here create a wide Zone once price enters the zone you add a long Wick candle form showing momentum loss you then had the bearish engulfing candle form that exited the zone and is when you would look for short entries you can also place a trendline like this and enter on the brick your exit 0.1 would be this swing low here these reversal points here create a wide Zone once price enters the zone you add two long wick candles form showing a reaction you then had the bearish engulfing candle form that exited the Zone this confirms the reversal and is when you would look for short entries these reversal points here create a wide Zone once price enters the zone you add a long way candle form showing a reaction you can place a trend line on the immediate Trend like this and once price breaks the trend line with the bullish momentum candle you would look for long entries you can also place a trend line on the larger downtrend and once it broke up here you can take continuation long entries let's show one more this is the Aussie dollar currency pair these reversal points here create a wide Zone once price enters the zone you add along with candle form showing a reaction you then had the bullish engulfing candle form which confirms the reversal and is when you would look for long entries your exit Target one is this recent swing High here so moving on to strategy number three which is a false breakout reversal trade setup this reversal Point here gives you your key level as price comes back up it breaks through the level a lot of breakout Traders would have entered long here expecting price to continue on upwards price then forms a big bearish engulfing candle in the opposite direction signaling that this is a possible false breakout now all those breakout traders that entered long are trapped and their stop losses are somewhere in this area here meaning this bearish engulfing candle that formed would have hit a lot of those breakout Traders stop losses which triggers even more selling pressure and results in a bearish engulfing momentum candle like this to form knowing that all this occurs on the back end once you had that first bearish engulfing candle form you would look for an intraday Trend change confirmation before taking short entries on the lower intraday time frames to ride this heavy bearish momentum down let's chill this again this reversal Point here gives you your key level as price comes back up it breaks through the level before a bearish engulfing candle forms that is also a candle color change signaling a possible false breakout if you get an intraday Trend change confirmation you would look for short entries you can also place a trendline like this and take continuation short trades down here these reversal points here give you your key level as price comes back down it breaks through the level before a bullish engulfing candle forms signaling a possible false breakout place a trend line on the immediate Trend and enter long on the break here or place a trend line on the long-term Trend and enter long on the break here so let's bring in the usage of multi-time frames to find that intraday Trend change confirmation on the left is the main time frame and on the right is the intraday time frame of the same asset these reversal points give you your key level as price comes back down it breaks through the level before a bullish engulfing candle forms that is also a candle color change signaling a possible false breakout Now using only one time frame you wouldn't be able to enter until after this higher high bullish engulfing momentum candle forms and closes up here as this would be your Trend change confirmation if you entered long right away on just this bullish engulfing candle here without looking at anything else this could end up being a fake out reversal and price could continue on downwards don't forget that this is a current moving downtrend so to validate this earlier entry point here you need to look inside of this area on the lower intraday time frame on the right for any form of price action that signals a trend change from a downtrend to an uptrend which you had through the Divergence that formed right at the key support level followed by the higher high which confirms that this was indeed a false breakout and is when you would take long entries so moving on to strategy number four which is an engulfing candle breaking through a key level and looking for an intraday confirmation and continuation entry on the left is the main time frame and on the right is the intraday time frame of the same asset these reversal points give you your wide Zone price then breaks through the Zone with the bullish engulfing momentum candle and makes a higher high now how do you know if this is a real breakout or a false breakout you need to look inside of this moving trend for either an intraday trade setup in the direction of your larger Trend or for an intraded continuation pattern followed by a break in the direction of the larger Trend so when looking inside of this trend but on the lower intraday time frame on the right you add a long trade set up here through the candle color change inside bar at the intraday support level which is when you would enter long or your second entry point is through the symmetrical triangle pattern and break above it and higher high which is when you would enter long whichever entry method you choose to use both confirm the bullish engulfing momentum candle that broke through the key Zone from the main time frame is real and not a fake out so moving on to strategy number five which is an engulfing candle breaking through a trend line and looking for an intraday confirmation and continuation entry this is the euro dollar currency pair on the left is the 12-hour time frame and on the right is the one hour time frame you had a descending triangle pattern price then breaks above the pattern and breaks the trend line with a bullish engulfing candle that makes a higher high now how do you know if this is a real breakout or a false breakout you need to again look inside of the moving trend for either an intraday trade setup in the direction of your larger Trend or for an intraday continuation pattern followed by a break in the direction of the larger Trend so when looking inside of the trend but on the lower one hour intraday time frame on the right continuation entry 1 was here through the descending triangle pattern followed by a break above the pattern and higher high continuation entry 2 was here through the pullback to the new intraday support level with two reversal points continuation entry 3 was here through the rising wedge pattern and break above with the bullsh engulfing candle and higher high whichever entry method you choose to use all confirm the bullsh engulfing momentum candle that broke through the trend line from the main time frame is real and not a faker let's show this again this is a dollar Swiss currency pair on the four hour time frame your trend line was here and price broke it with two bearish engulfing momentum candles that also formed a lower low for aggressive Traders they'll enter right at the close of this lower low engulfing candle here which is fine but for more secure Traders you would wait and see if you get a pullback entry which you had through the pullback to the support turned to new resistance Zone here followed by another bearish engulfing Candlestick pattern that confirms the trend continuation downwards now if you wanted an earlier entry point look inside of this area here on a lower intraday time frame such as the one hour time frame so let's pull that up you had a double top pattern right at the key Zone and once price broke the short-term trend line and made a lower low you would look for short entry points there is a series of Premium trading guides that work in combination with this video and are required to have to fully grasp these Concepts they are available on our site at wisetrade.com the specific link is in the description below don't forget to tell us in the comments below what topics you want us to cover next make sure to hit the like button on this video as it allows for our team to continue to produce more free videos on YouTube also go follow us on our Instagram account at ystring to stay notified about a lot of big projects we have dropping soon so thanks for watching and I'll see you in the next episode [Music] thank you

Channel: Wysetrade

Views: 138,717

Keywords: candlestick patterns, candlestick analysis, candlestick trading, candlestick patterns for beginners, technical analysis, candlestick charts, candlesticks explained, candlestick charts explained, candlestick psychology, candlestick patterns forex, candlestick chart basics, candlesticks for beginners, candlestick charts for beginners, engulfing candlestick pattern, engulfing candle strategy, bullish engulfing candlestick pattern, candlestick pattern, engulfing, engulfing candle

Id: Zr62KUGZKz4

Length: 19min 12sec (1152 seconds)

Published: Thu Aug 03 2023