The engulfing candlestick patterns are double-candlestick patterns that have a shorter candlestick with or without a shadow on one or both ends Day 1 candle , and a longer candlestick the Day 2 candle with a higher high and a lower low than the Day 1 candle.

The bullish engulfing pattern is made up of 2 candlesticks. The first candlestick is a bearish candlestick which may or may not have a shadow on both ends of the body.

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The second candlestick is longer and bullish in orientation. The bullish Day 2 candle has a higher high and a lower low than the bearish Day 1 candle.

This pattern results because there is an initial downtrend, represented with the bearish Day 1 candle. This spills over into the Day 2 candle which has a lower open than the Day 1 close, but buyers have had enough and they surge into the asset and drive it upwards to close above the high of the Day 1 candle, reflecting a change in sentiment and a preparation for a further push.

The appearance of the bullish engulfing in a downtrend signifies a change in trend, so the binary options trader should prepare to trade the new trend with a CALL option, as well as set price targets for both the TOUCH and NO TOUCH trade. The bearish engulfing pattern is made up of 2 candlesticks.

The first candlestick is a bullish candlestick which may or may not have a shadow on both ends of the body.

The second candlestick is longer and bearish in orientation. The bearish Day 2 candle has a higher high and a lower low than the bullish Day 1 candle. This pattern results because there is an initial uptrend, represented with the bullish Day 1 candle.

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This spills over into the Day 2 candle which has a higher open than the Day 1 close, but sellers come into the picture and force the price of the asset downwards to close below the low of the Day 1 candle, reflecting a change in sentiment for a further downward push.

The appearance of the bearish engulfing pattern in an uptrend should prepare the trader to purchase a PUT option and set price targets for both the TOUCH and NO TOUCH trade.

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Please note that it is only when these patterns occur at the extreme of the trend that the become useful for trading. The signal is reinforced if the bullish engulfing pattern occurs at a support level e.

This is a simple trade to execute and should make the trader some money if the rules are adhered to. If the signal is at a resistance level, the trade is reinforced.

The NO TOUCH strike price should be set above the bearish engulfing as shown in the snapshot. You must be logged in to post a comment. One of the candlestick patterns in question is the engulfing pattern, which serve as reversal patterns on both ends of the trend. There are two types of engulfing candlestick patterns seen in the markets: Bearish Engulfing Candlestick Patterns The bearish engulfing pattern is made up of 2 candlesticks.

More posts to check out: Trend Line Break-Out Strategy Trend Line Trading. Fibonacci Strategy for Binary Options Trading.

Candlestick strategy – Profitable binary options with a candlestick strategy

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