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E-Book Engulfing by Gary

Engulfing patterns are candlestick formations in technical analysis that indicate potential trend reversals, consisting of two consecutive candlesticks. A bearish engulfing pattern appears during an uptrend, suggesting a shift to a downtrend, while a bullish engulfing pattern occurs during a downtrend, indicating a potential upward reversal. Traders use these patterns as signals for entering or exiting positions, but should combine them with other analysis tools for better accuracy.

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718 views8 pages

E-Book Engulfing by Gary

Engulfing patterns are candlestick formations in technical analysis that indicate potential trend reversals, consisting of two consecutive candlesticks. A bearish engulfing pattern appears during an uptrend, suggesting a shift to a downtrend, while a bullish engulfing pattern occurs during a downtrend, indicating a potential upward reversal. Traders use these patterns as signals for entering or exiting positions, but should combine them with other analysis tools for better accuracy.

Uploaded by

etemplecnn
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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What is Engulfing?

"Engulfing refers to a candlestick pattern in


technical analysis where one candlestick completely
engulfs or covers the body of the previous
candlestick. It typically consists of two consecutive
candlesticks and can be either bearish or bullish"

#GaryGoldTrader
#GaryEducation
#TradeSmartWithGary
What is Bearish Engulfing ?
Bearish Engulfing :
1 ) Bearish engulfing is a candlestick pattern that typically
occurs during an uptrend and suggests a potential reversal
towards a downward trend. The pattern consists of two
candlesticks:

The first candlestick is a smaller bullish (upward)


candlestick, indicating that buying pressure is still
present in the market.

The second candlestick is a larger bearish (downward)


candlestick that completely engulfs the body of the
previous bullish candlestick. The bearish candlestick
represents increased selling pressure and the potential
dominance of bears over bulls in the market.

The bearish engulfing pattern suggests a shift in market


sentiment from bullish to bearish, indicating that sellers
may have gained control and that a downtrend might
follow. Traders and analysts often interpret this pattern
as a potential selling signal or an indication to be
cautious about further price declines.
Bearish engulfing view :

SELL

#GaryGoldTrader
#GaryEducation
#TradeSmartWithGary
What is Bullish Engulfing ?
Bullish Engulfing :

2 ) Bullish engulfing is a candlestick pattern that usually


occurs during a downtrend and indicates a potential reversal
towards an upward trend. The pattern also consists of two
candlesticks:

The first candlestick is a smaller bearish (downward)


candlestick, reflecting the prevailing selling pressure.

The second candlestick is a larger bullish (upward)


candlestick that completely engulfs the body of the
previous bearish candlestick. The bullish candlestick
represents increased buying pressure and the potential
dominance of bulls over bears in the market.

The bullish engulfing pattern suggests a shift in market


sentiment from bearish to bullish, indicating that buyers
may have gained control and that an uptrend might
follow. Traders and analysts often interpret this pattern
as a potential buying signal or an indication to be
cautious about further price increases.
Bullish engulfing view :

Take Profit 2

Take Profit 1

BUY

#GaryGoldTrader
#GaryEducation
#TradeSmartWithGary
Bullish/Bearish Engulfing Pattern :

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#GaryEducation
#TradeSmartWithGary
IN SUMMARY :
Engulfing patterns are significant candlestick patterns
used in technical analysis to identify potential trend
reversals. The bearish engulfing pattern occurs during an
uptrend and consists of a smaller bullish candlestick
followed by a larger bearish candlestick that completely
engulfs the previous candlestick. This pattern suggests a
potential shift from an uptrend to a downtrend, indicating
increased selling pressure.

Conversely, the bullish engulfing pattern occurs during a


downtrend and consists of a smaller bearish candlestick
followed by a larger bullish candlestick that engulfs the
previous candlestick. This pattern suggests a potential
shift from a downtrend to an uptrend, indicating
increased buying pressure.

Both patterns serve as signals for traders to consider


potential trend reversals. However, it's important to use
engulfing patterns in conjunction with other technical
analysis tools and indicators for confirmation and to
mitigate false signals. By incorporating engulfing patterns
into their trading strategies, traders can potentially
identify opportune moments to enter or exit positions,
effectively managing risks and capitalizing on market
movements.

#GaryGoldTrader
#GaryEducation
#TradeSmartWithGary

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