Which Bullish Candle is correct

Bullish candle: I see some say the Bullish candle must cover the high, body and low of previous candle. Others say the body of Bullish candle must cover the body of previous candle body. Which is correct. Or are both applicable.

A bullish candle is a candle with its close higher than its open ... nothing more nothing less.

What you are describing is an engulfing candle - as Ferru said, open greater than close = bullish regardless of size or shape. See description here: http://www.chart-formations.com/cand...engulfing.aspx

Cheers
maahome

You're conflating a candle with a pattern. FerruFX was correct, a bullish candle is one that closes higher than the open.
A bullish pattern, however, can be interpreted many ways, depending on the previous candle(s), trend, etc.

Steve Nison's books on identifying candlestick charts / patterns are probably the best known.

Exactly. No more, no less. Everything else is adding more layers of analysis you maybe don't need.

I wasn't talking about analysis of any kind ... Just explaining to the OP the definition of a bullish candle.

meant engulfing sorry.

thanks, I meant the engulfing patterns. This site shows the way I interpret the setup. Other sites state the engulfing candle must cover the previous candle from low to high.

Let me start by saying it is not as easy as Open < Close = bullish.

This is not meant to be an exhaustive examination of the subject, just a simple primer. If you want to discuss this more in-depth, please join us in the Volume Spread Analysis (VSA) thread.



Example 1:

While Candle #1's Close is higher than its Open, this cannot be a bullish candle. The close is in the bottom half of the range of the candle. How can a bullish candle close below its midpoint? How can a bullish candle have a large Selling Tail? This is made clear with the increasing volume on this candle. Volume represents the effort and all the (would-be bullish) effort on this interval failed to result in a close above the midpoint.

Example 2:

Let's take a look at candle #2 first. This candle does Close higher than it Opens, but it is not bullish. Again we must look at the volume. The volume is increasing but the range is decreasing. If you look at the volume on Candle #1, it is about 2/3 of Candle #2. But the range of Candle #2 is about 1/3 of Candle #1. In other words, more effort was used on Candle #2 and it resulted in less distance (range) being covered. The range is being compressed by the Composite Operator (CO) and indicates the bearishness of the CO. Accordingly if the CO is bearish, the interval cannot be bullish.

Candle #1. Although we can not make any relative comparison to the previous candles, this interval does look bullish.

Example 3:

This is what a Bullish candle looks like. The close is at the high of the range, the volume is increasing (but not excessive) and the next candle closes higher.

Example 4:

If you use Candles, an engulfing line is when the BODY (Open-Close) surrounds the body of the previous candle. Specifically, the Open of the current candle opens lower than the open of the previous candle and the close of the current candle closes higher than the previous body.

Note that the middle example shows a candle that does not engulf but has a larger range (H-L) than the previous candle. The last example is the same as the middle example, but with price bars instead of candles. If you use bar charts, it does become engulfing because it is based on ranges, not bodies.

In that case,a bullish engulfing can simply relate exactly what u are saying..but there are different formation of bullish candle patterns depending on the price action key levels.

The answers right here. It's just a representation, nothing more, nothing less.