Pivopen

Bullish and Bearish Engulfing Patterns Strategy

  • Bullish and bearish engulfing candlestick patterns signals a reversal of the prevailing trend.
  • If you see a bar has higher highs and higher lows compared to the previous bar, it is an outside bar. 
  • If the closing price is lower than the opening price, then it is a BEOB – Bearish Outside Bars
  • If the closing price is higher than the opening price, you guessed it right, it is a BUOB – Bullish Outside Bars.
  • In the figure, we can see a large bearish candlestick has engulfed the previous, smaller, bullish candlestick. By definition, it is a Bearish Outside Bar (BEOB).
  •  If you have placed a sell stop order few pips below the low of the BEOB candlestick and targeted the next pivot zone, it would have turned out to be a winning trade with a decent reward to risk ratio.

Add comment

Topics

Recent posts

Follow us

Don't be shy, get in touch. We love meeting interesting people and making new friends.

Most popular

Most discussed