Candlestick Strategy:

"Engulfing Pattern"

Covered in this video:


Two Types of Engulfing Patterns

The perfect bullish engulfing pattern will engulf both the opening and closing of the previous day, as well as the highs and lows of the previous day. On a bullish key reversal, you must close above the highs of the prior day.  The same goes for the bullish engulfing pattern. And think about the fear that goes on in people's minds as the stock, the next day, eclipses the highs of the previous day, but then closes below the low of the previous day. If you witness this type of price action, there is a higher probability that the stock is about to make a move in that respective direction. Engulfing days are also called outside reversal days. Look for where these patterns occur at historical resistance or support levels. Knowing these resistance and support levels are where your edge will come as a trader. You can look for these engulfing patterns either intraday, or on the daily, weekly or monthly basis.


Bottom Third And Upper Third Explosions

These formations are most effective during continuation breaks that occur at the bottom third of a down trend, or the upper third of an uptrend.

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My name is Robert Desmond and I am the founder and C.E.O. of The Contrarian Trader Inc.

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