MT4 Engulfing Candles Indicator

What is the Engulfing Candlestick Pattern?

 The bearish Engulfing formation can be seen in bullish trends. The pattern starts with a bullish candle. will then c fully engulfed by the body of the next candle, which is bearish. 

Candlestick formations can provide high probability signals about a potential outcome on the price chart. The Engulfing candlestick pattern is usually made up of two candles (two periods). One candle gets “engulfed” by the next candle on the chart. The first candle should completely fit inside the body of the second candle. 

Trading the Engulfing Candlestick Setup

A reversal is common when there is an Engulfing candlestick setup on the chart. Engulfing Candlestick patterns are a high probability price action approach for trading bullish and bearish candlestick patterns

If the price is moving up and an Engulfing pattern is formed, this gives an indication that a top might be forming now. The opposite is also true. If price is moving down and an Engulfing pattern is formed, price action might be forming a bottom and potential reversal.

Bullish Engulfing Pattern

The bullish Engulfing pattern could be found during bearish trends. It starts with a bearish candle on the chart. Then this candle gets fully engulfed by the body of the next candle on the chart, which is bullish. The MT4 Engulfing Candles Indicator will automatically draw a green arrow on the chart when a Bullish Engulfing set up appears.

Bearish Engulfing

The Bearish Engulfing pattern on the chart can be seen in bullish trends. A bullish candle will become fully engulfed by the body of the next candle, which is bearish. This pattern is showing a strong possibility for a bearish reversal set up. A red arrow is automatically drawn on the chart by the MT4 Engulfing Candles Indicator when this pattern is formed.

NOTE: Engulfing trading rules:

1. Open a trade when the price closes at the confirmation candle.

2. Place a stop loss order beyond the opposite side of the Engulfing formation.

3. Stay in the trade for a minimum price move equal to the size of the Engulfing pattern, or use price action rules to extend the duration of the trade.