Valid engulfing patterns and inside bars

Beginner Questions
1

Hi everyone,
I am new to forex and babypips. I am studying candlestick patterns but am a bit confused as to whether i should take into account the shadows or wicks when i look for engulfing patterns and inside bars.
Any examples would be greatly appreciated.

2

Yes. The wicks should be considered.

On engulfing patterns/inside bars, you want the wicks to be short. A big bodied candle is a decisive candle. The longer the wicks, the more indecision is evident.

3

I find that short wicks in the direction of the candle (ie. small upper shadow on bullish candle) are what you want, but it is ok to have a longer wick in the direction of the preceeding trend for a reversal pattern. (ie. bullish candle with small upper shadow but longer lower shadow)

The way that I look at it, both the real body and wick tell the story of any given session … a bullish candle with a small lower shadow and long upper shadow is still an indication of bearish pressure.

4

Woody, there are several places on this site to look at. First start in the school and you will find several patterns and the explanations. Then use search and you will find several threads about patterns. You can also use google a couple of good sites that I can not name but you will see them.

to answer your question yes you will look at wicks and bodies together. Both will determine the type of pattern you have. An engulfing pattern will have the new candle longer than the previous candle. an engulfing bar will have a higher high and a lower low than the previous bar. the trend will determine if it is bearish or bullish bar.
an inside bar will have the new bar inside the length of the previous bar, sometimes this bar is preceded or followed by an engulfing bar. an inside bar will have a lower high and a higher low than the previous bar.
you may also want to look up a pin bar also.

There is a thread by tymen you look at about candlesticks, although I have not read it yet. so I don’t know how good it is but you can gain knowledge even from the bad.

good luck

5

The body is what matters with engulfing bars. The body of an engulfing bar can have equal low or high to the bar it engulfs. Also both bars can be equal in size.
I don’t trade inside bars so i can’t lament on them.

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6

Thanks for your help. its all much clearer now.

7

Source Threads : The Joy of CandleStick Trading (Part I & II)
Adventures in CandleStick Trading.

Author : Tymen.

Hope these images are of some use to your understanding of candlestick patterns. Longer wicks on top of the candle shows good selling pressure while Longer wicks on bottom of the candle shows good buying pressure. Hence you will find long upper wicks (2nd candle) on bearish engulfing and dark cloud cover patterns; while you will find long lower wicks (2nd candle) on bullish engulfing and piercing patterns.

Regards,
Muthu.
Chennai.
India.

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8

Thanks for the images they are very helpfull.
Are the dark cloud cover and piercing patterns the same as inside bars?
Would i use these at s/r levels as i would the engulfing patterns?

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9

Hi,

Welcome. I haven’t traded Inside bars so I dont want to pass on remarks about that unless i know something about it. The dark cloud and piercing patterns are also reversal patterns similar to the bearish and bullish engulfers. The major difference is the size of the second candle as compared to the first. You may use it the same way you use bearish and bullish engulfers.

Regards,
Muthu.

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10

Thanks Muthu.

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11

Most Welcome !

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