Since there is a GAP down post bearish engulfing, stop loss is accordingly adjusted. Stop loss can be at a high of bearish candle which would increase the risk portion.
low of Bearish Candle can be alternately taken as stop loss as it is a GAP down and the price may rally back to this point to fill the GAP before falling down.
Hi,
This is an appropriate trade plan for the bearish engulfing pattern
Your Entry should be below the low of the Engulfing Pattern.
Your Stop Loss should be placed slightly above the most recent high.
Stay in the trade for a minimum price move equal to the size of the Engulfing pattern.
Getting lot of clarity with your replies
I am curious to know,Are these rules fixed or we can be flexible as per our risk reward ratio and price movement.i need this clarification.