The document outlines a trading strategy using engulfing candles, which signal potential reversals in forex markets. It details how to identify bullish and bearish engulfing candles, including entry and stop-loss points, and emphasizes the importance of the time frame in trading decisions. Additionally, it suggests a risk-reward ratio and profit-taking strategies for traders using this method.

1. Engulfing Candle Trading Strategy
Engulfing Candles, due to their distinct
characteristics, provide potential reversal signals
for Forex traders
Here’s how to spot and trade them...

2. Open at or below
the previous close
Close at or above
the previous open
Close preferably
near the high
Bearish
Candle
Down
Trend
1
2
Bullish Candle 4
3
5
6
Bullish Engulfing Candle
1 2 3 4 5 6 = Buyers Are In Control!+ + + + +

3. Open at or above
the previous close
Close at or below
the previous open
Close preferably
near the low
Bullish
Candle
Up
Trend
1
2
Bearish Candle 4
3
5
6
1 2 3 4 5 6 = Sellers Are In Control!+ + + + +
Bearish Engulfing Candle

4. ENTRY
ENTRY
STOP
STOP
Bullish Engulfing
Candle
Bearish Engulfing
Candle
Engulfing Candle Entry & Stop
Bullish And Bearish

5. ENTRY: Above the high of the
Bullish Engulfing candle
STOP: Below the low of the
Bullish Engulfing candle
Reverse Rules For Bearish Engulfing
TARGET: 1:1 Risk:Reward or higher
At a minimum take half profits at 1:1
and move Stop to break even for the remainder
Engulfing Candle Trading Plan

6. Produced by
Bear in mind, the higher the
time frame the stronger the signal
This means give pay much more attention to an
engulfing on the Weekly time frame than on, for
example, the 1 Hour time frame
The PAST MT4 Indicator available at Forex Useful
automatically identifies Engulfing candles
Engulfing Candle Trading Strategy