Engulfing Candlestick Pattern : Complete Guide



                Engulfing Candlestick Pattern

                            Complete Guide 


       

          

                Engulfing Candlestick Pattern

                            Complete Guide 


Friends, if you are desperate to know about the "Engulfing Candle" and want to know how it works then you have come to the right place, stay with us, we will tell you what is the "Engulfing Candle"  and how it works, read my post completely. So let's get started.


Where you see only one candle in single candle stick pattern whereas in multiple candle stick, you will see two or three candles that is Multiple Candlestick Pattern, means two or three trading sessions, firstly multi pattern which We'll see that is the "Engulfing Candle"



First of all we know the meaning of "Engulfing Pattern", it's means "to cover", that means a candle which was formed a day earlier, the next day's candle has completely covered it, that is shown in the picture below.



Just you have to keep in mind that the length of the candle should not be too much and this thing is applicable to every candle because when the candle is formed with good volume, that means the stock moves 10 - 12% in a single day. It has been said that profit booking is also done in it for a day or two, but taking good volume shares for short term is very beneficial as it means smart investors are investing money in it. 

                Engulfing Candlestick Pattern

                            Complete Guide 


As you can see in the picture below that at the time of "Bearish Engulfing Pattern" was formed and with good volume too and after that the buyers activated and it continued for a long time, and the thinking behind this, the sellers who have been selling in it for a long time become alert after the formation of the "Engulfing Pattern" and start cutting their positions.


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I show you a similar picture in which "Engulfing Pattern" was made in two places but at one place (in the blue circle) it worked well but at one place (in the red circle) it was a trade trap that's why I told this earlier also, after the candle is formed, the next day's trend must be seen, that the day is bear or bull.




And what I told you the rule earlier is to buy in uptrend and sell in downtrend (weakness), means to go with the market and not in the opposite direction of the market, then those people also start buying, due to which the market bounces further, if it Definedly an "Engulfing Pattern" is a pattern that is formed at the top of the chart, giving rise to a downside risk, and if it forms a bottom in the chart, it indicates a bullish trend (as shown in the above chart).


Now let us see another chart, when this pattern is formed there was a lot of buying in the market, although this is also a rare chart where this pattern is formed very quickly that too both Bearish and Bullish and all worked perfectly have done.




In the above picture you will see that the "Engulfing Pattern" formed after the fall and the movement of the stock changed which remained unchanged for a long time. The risk averse takes a trade at 3:20 when after the candle is formed, he sees its movement the next day whether the stock is really going up or is it a trade trap as I showed you in the above picture


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By the way, keep reading my article because the decision is not made only by looking at the candle, many things are seen before taking a trade like global market, news, some announcement or tweet of US president, Volume, breakout, RSI, PE Ratio, Fundamentals of the Company, Balance Sheet of the Company, Debt on the Company, etc. everything has to be seen, I will tell you all that in the coming chapter.


But now you must be thinking that there are thousands of companies listed in NSE, so how can we check all this, then your aim is only to earn money, you dont need to put your mind in all the shares and need only a little hard work & learn. And anyway after I teach you I will tell you the way of all this, just stay with us, here I am showing you another chart.




This chart is a very rare chart, but if this pattern is formed, then such an opportunity should not be missed, the special thing is that the formation of Doji after the engulfing pattern gives more strength to this pattern. Traders who were buying till now suddenly sell out, then the Engulfing Pattern is formed.


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One more thing that I missed to tell you is that selling can also mean that some of the people who were bullish are booking profits. Selling does not always mean that the market is bad. it is also called correction in share market language.


But those who were holding the stock do not cut their positions and wait because they also know that this can be profit booking but next day it becomes Doji which means both "buyer and seller" come. So in such a situation, the bullies get nervous and start cutting their positions, then the next day after the doji, there is a further decline and since most of the people move with the market (as per our rule buy in uptrend and sell in downtrend) then this decline may be for three to four days or more, that's why I like Doji more because it confirms trades.


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(You can also see all these patterns yourself on Investing.com or on Moneycontrol.com)


So friends, I hope that you have fully understood the meaning of "Engulfing Candle" and also understood that when and under what circumstances it is formed and what you have to do after its formation, please understand it well if you have any question you can ask me in the comment section, I will definitely answer your question.


---Thank You

By : www.marketkipathshala.in



               Engulfing Candlestick Pattern

                            Complete Guide 

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  1. काफी अच्छा लगा यह पोस्ट पढ़कर , और candlestick के बारेमे काफी अच्छा आर्टिकल है
    Market with Jayesh Yogi

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