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  • #5297
    EQSIS
    Keymaster

    What is Engulfing pattern? What are its conditions to qualify? When to buy and Sell?

    #5693
    Abirami Duraisamy
    Participant
    Rank: Level 5

    In the candlestick view, after significant rise or fall, when the previous day body is completely covered by today’s body with the reversal colour and significant volume, then it can be identified as engulfing pattern.

    Condition to quality Bearish engulfing:

    Increase in price trend observed for past few days & Latest Red body is covering the previous day green body with significant trading volume.

    When to Sell:  Create short position when the price goes below latest red body’s lowest price(A). Stop loss:<span style=”line-height: 1.5;”>Latest Red body’s highest price(B), Risk =A~B.</span>Target is A + Risk. Buying should happen at the target or at stoploss (price goes above B).

    Condition for bullish engulfing:

    Fall in price trend for few days observed & Latest green body is covering previous red body with significant volume.

    When to Buy: Create long position when the price goes above latest green body’s highest price(A). Stop Loss: Latest green body’s lowest price(B). Risk = A~B, Target is A+Risk, Selling should happen at the target or at stop loss(price goes below B)

    #5797
    Pradeep
    Participant
    Rank: Level 4

    Engulfing pattern is a reversal candlestick pattern.

    Bullish Engulfing Candlestick Pattern is a bullish reversal pattern, usually occurring at the bottom of a downtrend. The pattern consists of two Candlestick, small bearish candle stick on day one and a bullish candle on day 2. The bearish candle real body of Day 1 is usually contained within the real body of the bullish candle of Day 2.

    Condition for Bullish Engulfing :

    1. The recent fall in price should be witnessed.

    2. The bullish body should cover the previous days bear body.

    3. There should be significant volume should be noticed during the formation of engulfing.

    We can create a long position after the bullish engulfing pattern is formed with significant volume.

     

    Bearish Engulfing Candlestick Pattern is a bearish reversal pattern, usually occurring at the top of a uptrend. The pattern consists of two Candlestick, small bullish candle stick on day one and a bearish candle on day 2. The bullish candle real body of Day 1 is usually contained within the real body of the bearish candle of Day 2.

    1. The recent uptrend should be witnessed.

    2. The bullish body should cover the previous days bear body.

    3. There should be significant volume should be noticed during the formation of engulfing.

    We can create a short position after the bearish engulfing pattern is formed with significant volume.

    #6305
    bhavani
    Participant
    Rank: Level 7

    Engulfing pattern:

    Bullish:

    It is a reversal pattern after a recent price fall. The green body of the engulfing pattern should cover the entire previous day body. Increase in the volume is expected.

    Buy: when the price goes above the previous high and stop loss when it goes below the previous low. reward = risk taken

    Bearish:

    It is a reversal pattern after a recent increase in price. The red body of the engulfing pattern should cover the entire previous day body. Increase in the volume is expected.

    Sell: when the price goes below the previous low and stop loss above the previous high. <span style=”line-height: 1.5;”>reward = risk taken</span>

     

    #6312
    khushi
    Participant
    Rank: Level 5

    engulfing pattern is simple and reliable pattern, its reversal pattern good for weekly trades.

    bullish engulfing – latest green body should cover the previous days red body completely, trading volume might increase, the bullish engulfing should appear after a price fall. buy when you see the price crossing the engulfing days high, profit will be risk taken.

    bearish engulfing – red body should cover the previous days green body completely, trading volume might increase, the bearish engulfing should appear after a rise in prices,  sell when the prices crosses the previous days low.

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