That depends on what you consider to be an engulfing candle.
I believe that the most common definition is when the candle body engulfs the previous' candle body. Highs and lows are not considered.
Hi
Hello,
Just as additional information that there is no guarantee about the similarity of candle shapes in every broker.
At uncertain times it has been proven that the shape of candles in each broker can be different.
To find this you have to find the strategy which are used by pattern makers,
There are two types of strategies
1. Used by floor traders and hedge funds which are supreme strategies including fibonacci, Pivot and any other method which is based on mathematical calculation
2. Chart patterns, Candlesticks, Harmonics Patterns etc, which are not supreme strategies, These are often confirmed by a trader by verifying swings and other things, Engulf candle is also a pattern which are tracked by price action traders, so until you find setups which are used by market movers, its not possible to know when any engulf candle will form,
3. Market Data : You need to be very careful when you are trading on candlesticks pattern because in lower timeframe candle can often be wrongly formed due to low volume, To overcome this problem, either watch patterns on Index chart where there is no Volume exists, or watch where there is large volume, or watch in higher timeframe above 1 hour.
Hi
If you study TheStrat, particularly TradeSniperSara #SSS50PercentRule on YouTube and Twitter, you will see that there is a good probability of finding an engulfing candle (TheStrat Type 3 candle) when the current candle has retraced over the 50% mark of the last candle.
Hope it helps.
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