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...

 Bullish Engulfing Candle

Close preferably
6
1 near the high
Down Close at or above
5
Trend the previous open
Bullish Candle 4
Bearish Open at or below
2
Candle the previous close 3

1 + 2 + 3 + 4 + 5 + 6 = Buyers Are In Control!

 Bearish Engulfing Candle

Bullish Open at or above

2
Candle the previous close 3
Bearish Candle 4
1 Close at or below
5
Up the previous open
Trend
Close preferably
6
near the low

1 + 2 + 3 + 4 + 5 + 6 = Sellers Are In Control!

 Engulfing Candle Entry & Stop
Bullish And Bearish

Bullish Engulfing Bearish Engulfing

Candle Candle

STOP
ENTRY

ENTRY
STOP
 Engulfing Candle Trading Plan

ENTRY: Above the high of the

Bullish Engulfing candle
Reverse Rules For Bearish Engulfing

STOP: Below the low of the

Bullish Engulfing candle

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 Strategy
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

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