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(binned per thread starter’s request) The Engulf Method

  • #61
  • Feb 4, 2014 8:05pm Feb 4, 2014 8:05pm
Quoting piprac
{quote} I believe you are describing an OB - an outside bar where the most recent closed candle's high & low is complete outside the high & low of the previous candle; an engulfing candle's open & close just needs to exceed the open and close of the previous candle - or are my definitions wrong? p.
We can certainly argue about the precise definitions of candle formations but what is more important is the idea that after price has tested a s/r area or s/d area that it moves away decisively. Look at the examples here and in the PDF and then just practice looking at raw charts and notice the character of price bouncing from s/r or s/d areas. This is really what counts.
  • #62
  • Feb 4, 2014 8:16pm Feb 4, 2014 8:16pm
The H4 candle bouncing off resistance doesn't meet the definition of an engulf or an outside bar. It is merely a bearish candle. It is a rather impressive bearish candle coming off key resistance and that is what is important. The H1 chart also shows that it was the way price moved away from resistance and exited the yellow box that got me interested in the trade. The candles are bearish and if they meet the definition of and engulf then great but that to me is not the most important thing here.
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  • #63
  • Feb 4, 2014 8:21pm Feb 4, 2014 8:21pm
Just be sure I am not trying to take away from the value of precise definitions of bars/candles nor their use in a trading plan/strategy. The J16 thread and website, of which I am a member (no promotion intended), have done very good work with here and I would encourage any new trader to visit the thread and spend some time there learning the value of PA as defined by specifically shaped candles/bars
  • #64
  • Feb 4, 2014 9:23pm Feb 4, 2014 9:23pm
I updated the PDF on page 1 slightly to reflect more accurately my take on "engulfing" candles and patterns.
  • #65
  • Feb 4, 2014 9:42pm Feb 4, 2014 9:42pm
Trade closed. Time for bed
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  • #66
  • Edited 7:00am Feb 5, 2014 6:30am | Edited 7:00am
Hi Winston. I'm still trying to understand your method. Would you mind explaining a bit more about entering a trade please?

This a crop from the chart you posted.

Yellow arrow - shows that there's an S/R level there.
Red arrow - shows large bar going right through the level

So when price bounces off another level on top, this would be your target area right? Do you wait for the bounce candle to close before you enter? I'm curious because some examples in your PDF, the engulfing bars were so large with very little room to move to the target area.

Attached Image
Everything you can imagine, is real - Pablo Picasso
  • #67
  • Feb 5, 2014 6:37am Feb 5, 2014 6:37am
Quoting JohnBull
{quote} I think usd / cad was a classic entry in now engulf h4.{image}
I think its much depending of broker type... regarding closing, my chart is not like yours on H4
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fokyou forexfactory
  • #68
  • Feb 5, 2014 6:50am Feb 5, 2014 6:50am
This is an excellent thread. I'm using a similar approach by waiting for PA to bounce from key S/R levels.
  • #69
  • Feb 5, 2014 7:43am Feb 5, 2014 7:43am
Quoting DNTme
{quote} I think its much depending of broker type... regarding closing, my chart is not like yours on H4 {image}
dont forget the obvious in trading, how many chances do you think the bulls want?

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tradewith60
  • #70
  • Edited 7:59am Feb 5, 2014 7:49am | Edited 7:59am
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Quoting DNTme
{quote} I think its much depending of broker type... regarding closing, my chart is not like yours on H4 {image}
Hello DNTme,
This is my chart. Price hasn't quite made it to my level. 60 makes a very good point.
  • #71
  • Feb 5, 2014 7:54am Feb 5, 2014 7:54am
Quoting Direwolf
Hi Winston. I'm still trying to understand your method. Would you mind explaining a bit more about entering a trade please? This a crop from the chart you posted. Yellow arrow - shows that there's an S/R level there. Red arrow - shows large bar going right through the level So when price bounces off another level on top, this would be your target area right? Do you wait for the bounce candle to close before you enter? I'm curious because some examples in your PDF, the engulfing bars were so large with very little room to move to the target area....
Hey Direwolf,
Please include the pair so I can find it. Right now I have up nearly 20 charts.

Study the PDF and the charts here. I have noticed that large bullish or bearish candles often create their own levels (s/r or s/d). I don't trade these candles. I wait for price to come back at some point in the future. I may be the next day or several days later. Once price comes back to the area I wait for a reaction. If price breaks through the level I will keep the level on my chart and wait for it to come back again. I'll see if I can find an example.
  • #72
  • Feb 5, 2014 7:58am Feb 5, 2014 7:58am
Quoting 60minuteman
{quote} dont forget the obvious in trading, how many chances do you think the bulls want? {image}
although I should of looked at the weekly

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tradewith60
  • #73
  • Feb 5, 2014 7:59am Feb 5, 2014 7:59am
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  • #74
  • Feb 5, 2014 8:32am Feb 5, 2014 8:32am
Quoting Winston Reed
{image}{quote} Hello DNTme, This is my chart. Price hasn't quite made it to my level. 60 makes a very good point.
yes, no question asked about that.

But talking about engulfing on H4 as he (johnbull) was showing...i dont have same thing in my chart.
fokyou forexfactory
  • #75
  • Feb 5, 2014 8:42am Feb 5, 2014 8:42am
Quoting DNTme
{quote} yes, no question asked about that. But talking about engulfing on H4 as he (johnbull) was showing...i dont have same thing in my chart.
You probably have different feed. I am using Oanda.
  • #76
  • Feb 5, 2014 8:50am Feb 5, 2014 8:50am
It's a AUDJPY H1
Everything you can imagine, is real - Pablo Picasso
  • #77
  • Feb 5, 2014 9:25am Feb 5, 2014 9:25am
Quoting Winston Reed
{quote} You probably have different feed. I am using Oanda.
thinking to use axitrader as they dont have sunday candle. that should fix the problem
fokyou forexfactory
  • #78
  • Feb 5, 2014 9:35am Feb 5, 2014 9:35am
im long GA.

its based on H1 and H4 only.
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fokyou forexfactory
  • #79
  • Feb 5, 2014 10:06am Feb 5, 2014 10:06am
Quoting DNTme
im long GA. its based on H1 and H4 only. {image} {image} {image}
I don't see a good level you took this from but it seems your in profit.
  • #80
  • Feb 5, 2014 10:11am Feb 5, 2014 10:11am
Quoting Winston Reed
{quote} I don't see a good level you took this from but it seems your in profit.
so far so good.

daily 8225-30 was a nice support
fokyou forexfactory
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