How to Trade 5 Minute Chart with Engulfing Bar Price Action? | Forex Factory

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How to Trade 5 Minute Chart with Engulfing Bar Price Action?

  • #1
  • First Post: May 30, 2013 12:10am May 30, 2013 12:10am
Hey All,
Timon Weller here for forexreviews.info. Recently I started a thread here a couple of months ago on trading the weekly engulfing bars successfully at http://www.forexfactory.com/showthread.php?t=418199 and it got a lot of good feedback. Thanks everyone there. I hope I helped a lot of people there improve there trading..

However recently from my readers I got many questions on how to trade the 5 minute chart? In particular how to trade it profitably.. ? And is it possible..? Well it is..

First off, I wanted to say this is not my chart of choice ( I prefer h4, Daily and Weekly ) as there is so much noise on this chart, however because in one of my previous videos I had mentioned when I first started trading I traded the the 5 minute chart with Price Action and was profitable I was asked to explain how..?

I tried to explain in words and here is how I do it -

1. Look for significant candle - Engulfing
2. Place stop below previous candle entry.
3. Enter after significant engulfing candle..
4. Break even at whatever risk level entry risk is..
5. Take Profit at least at 1.5 to 1 risk or 2 to 1.. Meaning every successful trade has good risk reward.
6. Stay in when trade runs well by pulling stop along to just before previous candle close..

Attached Image (click to enlarge)
Click to Enlarge Name: engulfing-5-minute-strategy.jpg Size: 94 KB


Above is a image of it in action on recent EURUSD 5 minute chart..

And here is a video to explain it even further -
Inserted Video


Things to Ponder - What is interesting is that this 5 minute strategy is the same as my h4, daily or weekly strategy.. It just goes to show that this strategy if applied right works on any time frame..

If you have any questions on this simple strategy, let me know.

Regards,
Timon Weller
http://www.forexreviews.info
  • #2
  • May 30, 2013 12:18am May 30, 2013 12:18am
Hey All,
Wanted to add some more examples to show how it works in action and what to look for on the chart for entry..

Some more chart examples -

Attached Image (click to enlarge)
Click to Enlarge Name: gbpusd-5-minute-example.jpg Size: 102 KB


Above - Example on what to look for on GBPUSD for trades..

Attached Image (click to enlarge)
Click to Enlarge Name: aud-usd-example-engulfing-strategy-5-minute.jpg Size: 95 KB


Example above on AUDUSD, look at significant candles..

Regards,
Timon Weller
http://www.forexreviews.info
  • #3
  • May 30, 2013 3:28pm May 30, 2013 3:28pm
Quoting tinny79
Hey All,Wanted to add some more examples to show how it works in action and what to look for on the chart for entry.. Some more chart examples - {image} Above - Example on what to look for on GBPUSD for trades.. {image} Example above on AUDUSD, look at significant candles.. Regards,Timon Wellerhttp://www.forexreviews.info

Thanks for taking time out Timon, always liked naked charts with price action...will be watching close
  • #4
  • May 30, 2013 7:18pm May 30, 2013 7:18pm
Hey Tedge,
Thanks for the feedback, yeah simple price action is always the best if you ask me..

Have a nice day..
Timon
  • #5
  • May 31, 2013 2:40am May 31, 2013 2:40am
Hi Timon,took this bullish engulfing bar on cable yesterday,took 2 lots off and letting it play out on last lot.Keep posting cuz I love these sort of set-ups.I know you are trading the 5m but I wanted to get some feed back from yourself




double bottom engulfing!
Attached Image (click to enlarge)
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  • #6
  • Jun 1, 2013 6:20am Jun 1, 2013 6:20am
Unfortunately, you "missed" in your video many bad legal entry signals which lead to a loss.
It happens when you enthusiastic to show your system is doing well.
  • #7
  • Jun 3, 2013 7:44pm Jun 3, 2013 7:44pm
Quoting Tedge UK
Hi Timon,took this bullish engulfing bar on cable yesterday,took 2 lots off and letting it play out on last lot.Keep posting cuz I love these sort of set-ups.I know you are trading the 5m but I wanted to get some feed back from yourself double bottom engulfing! {image}
Hey Tedge and everyone..

I trade the 4 hour, Daily and Weekly mainly as they are more profitable and less stress with this strategy.. And for all those wondering i am a profitable trader.. This is a tried and tested years working strategy..

Yes correct with the setup there on the GBPUSD however better to put stop below the candle on entry.. Even if it retraces it tends to never retrace beyond that spot.. Looks like it should work out well.. Also if it runs good let it run by pulling stop up rather than having a take profit.. It depends on circumstances though, 5 minute is better to use take profit as it moves quick..

Have a nice day..
  • #8
  • Jun 3, 2013 7:57pm Jun 3, 2013 7:57pm
Quoting smilee89
Unfortunately, you "missed" in your video many bad legal entry signals which lead to a loss. It happens when you enthusiastic to show your system is doing well.
Hey Smilee89,
I think you missed something in the video, only taking significant engulfing candles.. I went over it and there was literally none missed there.. I mean literally because you may have spotted one.. I would have to go over it again.. If so, one more loss is no big deal.. The video is to train what to look for.. Like i said above if done right it is extremely profitable.. In fact, i challenge anyone to find anything more profitable out there..? The reason being is because i used to test systems and strategies for others for fun.. Nothing came close to this..

I trade this strategy on the h4, Daily and Weekly and am very profitable.. Works on any time frame though as shown in 5 minute here..

It is tried and tested method as long as you trade significant engulfing's and except losses when wrong.. On the 5 minute like i said on the video it is just over 50% probability ( ignoring BE in this equation ) however one still makes great profits because there wins are more than there loss..

Seriously the secret to Forex is not about how many wins, it is about how much you build your account.. Most people focus on success ratio and truly they are on the wrong road..

This strategy builds the account..

Regards,
Timon
http://www.forexreviews.info
  • #9
  • Jun 3, 2013 8:04pm Jun 3, 2013 8:04pm
Here is an example of some recent trade opps.. 3 wins and 1 small loss, however all will see that the wins if traded the way i say are way more profit than that one loss.. It is another example of why this strategy works..

Those wondering about BE, it is there because markets range sometimes, even on the 5 minute.. This stops stop outs during those periods..

Attached Image (click to enlarge)
Click to Enlarge Name: eurusd-5minute-profits.jpg Size: 108 KB


Look above at candles chosen, all are significant.. This is key, significant indicates order flow imbalance.. Same as paying hundreds per month on order flow technology, one does not need it if they read the candles..

Around 80 pips on first signal trade - more than 2 to one risk..
Around 17 pip loss on second trade - straight loss
Around 45 pips on third trade - more than 2 to one
Around 22 pips on last trade.. - more than 2 to one

Overall from 4 trades around 120 pips profit..

Regards,
Timon
  • #10
  • Jun 3, 2013 8:23pm Jun 3, 2013 8:23pm
Significant Engulfing:

I will repeat this as well, as i think many are getting confused on what i refer to as significant engulfing in the video, i mean a candle that is engulfing that engulfs more than one previous candle.. The more significant the better.. It is also about looking to the left with signal, if no candle to compare to left then simply strong candle is enough as seen in third signal above in previous shared image.. If there is only one candle to compare to then it has to close higher or lower than comparison candle..

I hope that helps..

All about training the eye to see what the candle is saying in each situation or signal..

Regards,
Timon
  • #11
  • Jun 3, 2013 8:34pm Jun 3, 2013 8:34pm
Quoting Tedge UK
Hi Timon,took this bullish engulfing bar on cable yesterday,took 2 lots off and letting it play out on last lot.Keep posting cuz I love these sort of set-ups.I know you are trading the 5m but I wanted to get some feed back from yourself double bottom engulfing! {image}
Hey Tedge,

Just realized that was a daily trade, well done there, exactly what to look for and just checked chart and it went well.. Good spotting.. You would be up over 200 pips now if still holding..

-- When trading the daily I use break even just past 40 to 50 pips profit..

Regards,
Timon Weller
  • #12
  • Jun 5, 2013 12:35am Jun 5, 2013 12:35am
Quoting tinny79
Here is an example of some recent trade opps.. 3 wins and 1 small loss, however all will see that the wins if traded the way i say are way more profit than that one loss.. It is another example of why this strategy works.. Those wondering about BE, it is there because markets range sometimes, even on the 5 minute.. This stops stop outs during those periods.. {image} Look above at candles chosen, all are significant.. This is key, significant indicates order flow imbalance.. Same as paying hundreds per month on order flow technology, one does not...
Even in post #9 you missed a few losing trades somehow.
Check yourself.
  • #13
  • Nov 24, 2013 11:12am Nov 24, 2013 11:12am
Quote
it is just over 50% probability ( ignoring BE in this equation ) however one still makes great profits because there wins are more than there loss..

It's interesting KISS idea, Timon, thanks for sharing!
But of course you understand, if you have >= 50% probability with 1 : 1.5 to 1 : 2 risk:reward, then... well it's pretty unique achievement. Sorry for being pessimistic
Good luck!
  • #14
  • Nov 24, 2013 11:30am Nov 24, 2013 11:30am
I watched this video. Unfortunately, I can not say something good. He is looking for candles in the past moves that prove his idea. Everyone can do this. I don't trust this analysis.
  • #15
  • Feb 9, 2014 2:58am Feb 9, 2014 2:58am
this is very nice strategy! thank you for sharing.
  • #16
  • Apr 4, 2014 12:45pm Apr 4, 2014 12:45pm
Quoting tinny79
{quote} Hey Tedge, Just realized that was a daily trade, well done there, exactly what to look for and just checked chart and it went well.. Good spotting.. You would be up over 200 pips now if still holding.. -- When trading the daily I use break even just past 40 to 50 pips profit.. Regards, Timon Weller
I agree. this is a very simple strategy with positive expectancy.

Tinny96, I'm not sure if this threads still active but if I was wondering if I can get some help. Do you find that the porbability/win rate increases if you take the engulfings with long term order flow or short term order flow or does it matter. I'm currently doing back testing but would like some testimony to compare too. Thank you.
  • #17
  • Mar 28, 2015 12:59pm Mar 28, 2015 12:59pm
Firstly thank you all for the information its providing some useful information however I'm looking back through charts and well I can see engulfing candles but the question I have is what qualifies it as a trade. For example if I was trading a 15 or 30 min chart would I wait for say 2 or 3 opposing candles before taking an engulfing trade or would I just take an engulfing regardless of the previous candles? This may seem like a silly question however I am looking to better understand this strategy and its principles if someone could please provide some more information it would be great

Thank you all
  • #18
  • Apr 3, 2015 9:20pm Apr 3, 2015 9:20pm
Hi Tim,
Thanks for posting the engulf strategy videos, they were clear and concise.Prior to watching your videos,
I felt there must be a holy grail indicator out there. But ive gone back to basics and learn to read the language of candlestick charts. By understanding support and resistance,I can see the positions others take and that Somebody wins and somebody loses.
I have quickly developed a simple EA, to help backtest it this Engulf strategy.
This EA can;
Buys and sells orders on a single engulf bar.
Customize Risk Reward (default is 1)
Enable Half close your positions when each reward hit.
Auto Lotsize management or fixed lot size
Can Execute orders only within Start hour & End Hour
send notifications to your fone once orders made
WIP for Breakeven and trailing.
Attached File(s)
File Type: ex4 OpGekkoEngulfStrategy.ex4   47 KB | 983 downloads

------------------------------------------
15min time frame on default settings from 30 march to 2 April 2015
Attached Image (click to enlarge)
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---------------------------------------------------------
15min time frame on optimised settings from 30 march to 2 April 2015

Attached Image (click to enlarge)
Click to Enlarge Name: chartoptimised.jpg Size: 258 KB

Attached Image (click to enlarge)
Click to Enlarge Name: chartoptimised2.jpg Size: 97 KB


Though this strategy I feel profit Trades 40-50 % wins (Hit and miss),not enough for a down payment for Lamborghini Roadster.
Reading upon, other engulf strategies, it seems to work better on counter trends.
Does any one have any ideas how to increase the win rates?

There are days in trading, i have more luck flipping a coin.
I don't throw darts at a board. I bet on sure things. Read Sun-tzu, The Ar
  • #19
  • Apr 6, 2015 1:59am Apr 6, 2015 1:59am
Hi Guys,

You can track my Engulfing Bar Price Action progress
at http://www.forexfactory.com/gordon.gekko#99

im using reward risk 2:1
On 15min , 4hour and Daily timeframe on EURUSD

Attached Image (click to enlarge)
Click to Enlarge Name: chartforwardtest.jpg Size: 200 KB


I will trade this strategy 24/7 till the end of this week.

Any comments or suggestions appreciated
I don't throw darts at a board. I bet on sure things. Read Sun-tzu, The Ar
  • #20
  • Apr 9, 2015 9:38am Apr 9, 2015 9:38am
Hi Guys.

I had network issues, so my trading just started again in the last 30hrs

http://www.forexfactory.com/gordon.gekko#86

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Im still hitting success rate of 45-50%.

My thinking now is since "the trend is my friend", where the EURUSD daily trend is bearish,
Attached Image (click to enlarge)
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then i feel i should only focus on sell orders based on bearish engulf bar (i.e the pullback) on the 15min timeframe .

In the meantime, I will stick to Tim's entry rules.

Anyone still trading this idea?
I don't throw darts at a board. I bet on sure things. Read Sun-tzu, The Ar
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