Hello,
Is this still classed as an engulfing pattern?
Hello,
Is this still classed as an engulfing pattern?
True engulfing patterns rarely happen in forex charts because they rely on an open at a different level to the prior close. This is rare and is somewhat random anyway because forex trading proceeds on a mostly 24-hour basis. Engulfing patterns and many orthodox candlestick patterns rely on a uniform close at the same time, with a period of the clock when there is no trading.
So be very cautious about using such patterns in forex.
This never really answered my question but thanks lol
Its not a true engulfing pattern. Its unlikely to produce as good results as a true engulfing pattern should. You could still use it as a basis for trade entry and stop-loss positioning but maybe a little extra caution would be appropriate.
Thank you! I like this explantation. I did use this pattern as an entry and it has provided good results so far! I will continue to be cautions though…