Engulfing pattern

Sometimes I come back to babypips school to read again main concepts and to deepen some topics.
Now I’m reading again something about price action because I’m reading Steve Nison’s books.
The question is: can an engulfing pattern appear only on a daily chart? Can I use a shorter time-frame or a longer one? Does it change the effectiveness?
Thank you :slight_smile:

the smaller the time frame the more “noise” you will see, that doesn’t mean an engulfing pattern on a 5 min chart is invalid, but an engulfing pattern on a 1hr or 4hr TF will be more convincing or on a daily there is an even better chance of the signal being valid…

So being equal other factors such as volumes or size of the candles, I’ve to prefer a larger time-frame, isn’t it?
Then: 5M<15M<1H<4H<1D<1W is this the logic?

Yes as said above the higher the timeframe the more significant the engulfing candle will be. Take some time and scan back through charts and find engulfing candles on each timeframe and see what happened to price. Personally I use the daily and 4 hour charts to trade but if I have a nice setup and I am waiting for an entry I sometimes go down to H1 chart to look for price action. In my opinion the 2 threads below are the best 2 price action threads so I would give them a read:

301 Moved Permanently


Thank you, I’ll try 15M, H1, H4, 1D and 1W in demo mode :slight_smile:
Good luck

The Engulfing Pattern is best on the 4H, D1 and usually on the M1 candles.
The smaller time frames below the 4H are not as stable and result in more losses vs wins.

Another pattern that is worth wild to check out is the “pin bar” on higher time frames as well.