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Engulfing Candle

Bollinger Bands Strategy For The DAX40 Today, I am going to speak about my new DAX 40 Bollinger Bands Strategy. I have been testing out a new strategy using the Bollinger bands, fib retracements, and fib extensions on the 4-hour chart for the DAX. I am currently forward testing this strategy and I plan to keep forward testing it until the end of the year so we can see how it fairs in the long run and if it's going to be profitable or not. I would like to share this idea with you all today. Let me explain the setup. We open up the 4-hour chart on the DAX and we open up the standard Bollinger bands. We then look for entries as soon as we see price break through the top or the bottom of the Bollinger bands. This is somewhat of a reversal strategy. I wait for the price to break either side of the bands, and then I look for the next candle to be the opposite of the candle that broke through or wicked through the bands. If the next candle engulfs the previous candle, I then use the fib retracements to find an entry. I run the fib retracements over the engulfing candle and enter on the 0.236 fib level. My stop will always be a few pips below or above the 1 fib level. I then take my trend-based fib extension tool and place the three clicks like so : First click – on the top or bottom of the Engulfing candle. Second click – The other side of the engulfing candle. Last click – simply drag the took towards the right and extend it out. I use these two fib levels for my targets. Generally, I like to see price touch the other side of the bands as my target and if the extension lines up with that, then great. I always look for a minimum risk to reward of 1 to 1.5 or 1 to 2 ( Depending on how far the extension takes us ) As you can see in the video below, so far in the month of July, this strategy generated close to 10% in profits ( risking 1% per trade) In August this strategy generated 3.5% So, so far we are doing well with it. I have done back testing with it but I prefer forward testing on a live account as this usually helps confirm the psychology for me entering and exiting this setup. So, I will keep posting videos whenever A Dax setup presents itself. Let's keep this testing going until the end of the year and then we can decide if we should try it on a funded challenge! The Vortex Trader
OANDA:DE30EURShort
by TheVortexTrader
2
CANDLESTICK PATTERNS BASICS | Engulfing Candle 📚Hey traders, In this educational post, I want to discuss with you one of the most accurate REVERSAL candlestick patterns - the engulfing candle. On ETHUSD chart, I spotted for you bullish & bearish examples of this pattern. The logic behind this pattern is quite simple: ⭐️In a bullish trend, after a strong directional movement, the price reaches some important structure level. Growing steadily and forming a sequence of green bullish candles the price suddenly forms a strong bearish candle. What is particular about that candle is the fact that its total range (distance from the wick high to wick low) & body range (distance from body open to body close) exceed the ranges of a previous bullish candle. 🔻Such a candle we will call a bearish engulfing candle. Most of the time it signifies a strong spike in selling volumes and willingness of sellers to push. With a high probability, such a formation leads to a pullback or even a trend reversal.
by Mr_HaMza_
DAX Long Setup - Are The Bulls Back? I am looking at trading the DAX today on the 4-hour time frame. Yesterday, we saw a major drop from the top of the daily resistance level. Price dropped around 2.5%. As we are still trending upwards and making higher highs and higher lows, we are now looking for an opportunity to go long. I have been testing a new strategy involving Bolinger bands, a fib retracement which I use to find my entry, and a fib extension which I use to find my targets. This might be a great time to test it out in a live market. THE LONG SETUP I like to wait for the price to pierce the bottom of the Bollinger bands. Once I see that price has pierced it, I then look for some sort of reversal candle. Something like a DOJI candle. If I see this, I then wait for the next candle to be a bullish engulfing candle, confirming that bulls are indeed buying in this area. Once this 4-hour engulfing candle closes, I throw on the fib retracement tool from the bottom of the engulfing candle to the top. I wait for the price to retrace back to the 0.236 level. This will become my entry zone. Once the price retraces to this level, this is where I will go long. I then put on the fib extension tool. This tool has three clicks. The first click is at the bottom of the engulfing candle, the second click is at the top of the engulfing candle. The third and last click is just a horizontal extension of the second click moved out to the right so we can see the levels. Now normally, these two levels that appear on the chart can be used for two possible targets. However, I like to use the middle Bollinger band as a guide for a target as well as the top of the Bolinger bands. But, we need to get a minimum of a one to two risk to reward. If the top level coincides with the 1.618 fib level, then that’s perfect confluence. I normally place my stop a few pips below the bottom of the engulfing candle. Now, I do not like pin-pointing bottoms. This is why this strategy needs to be trend following. The engulfing candle helps confirm that the bulls are still intact. I would also like to see the engulfing candle close above the yellow resistance zone, although it doesn’t have to. However, if it does, this will show even further confluence to this setup. As I write this, the current 4-hour candle has around 50 minutes left until it closes. Let's watch and see what happens with this. Hope you all have a good Thursday. See you all on the next one. The Vortex Trader.
OANDA:DE30EURLong
by TheVortexTrader
NASY100Nas was setting up for a great trading opportunity on both sides which is very rare to say the least. There were many confluences to have assisted with indication of buying and selling pressure for the day. Confluence #1: Triple Top pattern, Price closing below 13361.00 on lower TF, Price closing below the directional bias arrow of 13651.00 Short 7:1 Short 26:1 Long 22:1 Looking plainly at price action and overall technical analysis, there were multiple opportunities to have an edge of the market today. Happy Tuesday Traders.
N
by KeyTrades17
EUR/USD Looking For A Bullish Confirmation Bounce On SupportLooking at trading EUR/USD. We are on the 4-Hour Chart. As we can see, the price has been pushing downwards recently. Some would say we have broken out of a 4-hour ascending channel. I'm looking at the support around the 1.01 price point. We can see that this area was flipped from resistance to support and has bounced off of this zone every time we have come close to it. Does this mean that it will bounce off of this area again? We cannot assume that if the price touches this previous support level that price will bounce off of it and head back up. We need some sort of tradeable pattern or bullish confirmation entry that will help give us confidence and confluence to enter into a long position. A bullish engulfing candle at the bottom of this support zone would be ideal. We would also need to see strong volume accompany this engulfing candle. If the price breaks through this support zone and closes below, I will then start to look for short setups using that area that would then be flipped from support to new resistance. But we are not there yet. Let's keep our eye on the ball and wait for an entry. If we get our possible long position setup, I would suggest the price area of 1.025 as a good target area as we can see that this area has been respected in the past as resistance. Looking at the daily chart, we can see that the overall bias is still bearish. We have not broken out of that giant daily descending trend line, but on the 4-hour we are still trying to make higher highs and higher lows. This is why I am using the 1.01 price point as the make-it-or-break-it support level. If that level breaks, then we are officially looking for short positions again. Let's keep our eyes peeled. Hope you all have a great day. The Vortex Trader.
Long
by TheVortexTrader