Huzefa Hamid , contributor to DailyForex.

This Engulfing setup produces a simple but highly reliable trading strategy. Along with my Pin Bar Entry , it forms the core of my currency trading strategies.

However, this technical analysis strategy works well on any chart and any market, as long as the market has substantial volume. The Engulfing candle pattern is a two bar pattern that is quite easy to visually spot.

The term "Engulfing" refers to one candle's body engulfing or covering the range of the previous candle's body, like so:. The above is an example of a "Bearish Engulfing" setup.

The first candle has an Open higher than its Close; the second candle reverses that momentum and Closes Below its Open. Crucially, the second candle's body completely engulfs or covers the range of the first candle's body.

Bullish and Bearish Engulfing Bars Introduction

A Bullish Engulfing setup is just the other way around: In order for an Engulfing setup to be valid, both candles must have short wicks. There is no Holy Grail for successful trading, asserts Dave Landry, in this first of a three-part series.

The Magic of The Engulfing Pattern - And Trading It

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The term "Engulfing" refers to one candle's body engulfing or covering the range of the previous candle's body, like so: Click to Enlarge The above is an example of a "Bearish Engulfing" setup.

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9 Intra-Day Trading Strategies You Can Use Right Now!

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