Bearish Engulfing Pattern
Japanese
Candlestick Analysis
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here to post questions
The
image to the left represents a generic image of a Bearish Engulfing Japanese
Candlestick price action pattern and should only be used
for definition purpose to differentiate this pattern from other
generic Japanese Candlestick patterns. This price action pattern will form
at the top of a trend as a reversal or warning of price contraction (will go
sideways). In addition, the Bearish Engulfing Japanese Candlestick price
action pattern can signal failed
counter-thrusts (lower highs) or double tops.
Also, Japanese Candlestick patterns do
not define the price action. Instead, you should have already defined the
price action (understand the price action) prior to the appearance of any
Japanese Candlestick patterns.
Trader A identifies a bearish engulfing Japanese Candlestick
pattern and concludes the price action must be bearish. Trader A then uses
the bearish engulfing pattern trade signal as a trade entry strategy into the price action.
Trader B identifies a price action and then determines it's
bearish via a method not related to Japanese Candlestick analysis. In
addition, trader B then identifies a bearish engulfing Japanese Candlestick
pattern signal as a trade entry strategy into the bearish price action.
Results:
Statistically the bearish engulfing
Japanese Candlestick price action pattern will be more profitable and more reliable for
trader B in comparison to trader A.
Here's some basic price action
information for the generic Bearish Engulfing Japanese
Candlestick price action pattern.
Dark interval (open > close) will engulf the body
of the prior interval...an interval that can be a white interval (close1 >
open1) or a doji (close1 = open1).
There interaction is a open >
close1 and close < open1 resulting in the engulfing price action.
Price rising for several intervals prior to the white
interval (close1 > open1) or doji (close1 = open1) and
you can define "price rising" via whatever you want.
The generic Bearish Engulfing
Japanese Candlestick price action pattern by itself is not reliable if used as explained in most typical
Japanese Candlestick book or online discussions which is the exact same way
that most system designers, programmers, backtesters or academia
(researchers) approach their analysis of the pattern because the generic
pattern is very simple to code. However, profitable traders of the Bearish
Engulfing Japanese Candlestick price pattern do not use the generic version nor do
they use this pattern all by itself with no other market inputs.
With that said, you can easily increase
the
reliability of this particular Japanese Candlestick pattern via merging the price action of the
Bearish Engulfing Japanese Candlestick pattern with
trading methods involving changes in supply/demand and changes in volatility
such as our
WRB
Analysis Tutorials...a method that gives you the critical
understanding of the price action called context prior to the appearance of any
Japanese Candlestick patterns for trading.
WRB
interval must be the interval that's engulfing or is the interval before the
interval that's being engulfed.
WRB
interval is only via the
WRB
Analysis Tutorials.
Generic
Bearish Engulfing candlestick pattern must occur within a WRB Zone...a
WRB Zone described in the
WRB
Analysis Tutorials.
Note: WRB Analysis
Tutorials can be applied to bar charts, constant tick charts, volume based
charts or candlestick charts.
Further, if you want to increase the
reliability more, we highly recommend you replace the generic Bearish
Engulfing candlestick price pattern and use our advance custom Japanese Candlestick
price action pattern strategies via the
Advance Japanese Candlestick Trading Report (AJCTR).
However, the WRB Analysis Tutorials all by itself will help
you understand the price action you're trading and that will result in a
better understanding of the Bearish Engulfing candlestick pattern as in
occurs within the context of WRB Analysis. Yet, the AJCTR trade strategies
will give you a more reliable trade management after entry that includes
stop/loss management, trailing stops profit targets and exit signal. In
addition via the AJCTR, we provide support for
those that need helping in designing their own custom designed Bearish
Engulfing Japanese Candlestick price action patterns merged with WRB Analysis.
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click on image to view actual
size |
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The chart represents an
image of an actual trade (real money or simulator) that was taken by one of
our fee-based clients that uses WRB Analysis for generic Bearish Engulfing
patterns and advance custom Bearish Engulfing patterns from our
Advance Japanese Candlestick Trading Report (AJCTR).
Therefore, WRB Analysis improves the performance of any generic Japanese
Candlestick pattern you'll see in books or online discussion. In addition,
WRB Analysis is a requirement for the advance custom Japanese Candlestick
patterns in our Advance Japanese Candlestick Trading Report (AJCTR) as shown
in the chart.
Also, if you want an explanation of
the annotations key change in supply/demand, wrb s/r zones and pt
levels...join our
TSL Support Forum and ask questions. Our reply will contain useful
trading tips about the Bearish Engulfing Japanese Candlestick pattern
regardless if you purchase our
WRB
Analysis Tutorials
or our
Advance Japanese Candlestick Trading Report (AJCTR).
Do you
want to improve the performance of your Bearish Engulfing
pattern entry signals, exit signals, profit targets and know when a big price move
is about to occur along with a better
understanding of the price action you're trading via
learning more about wide range body, wide range bar or
expansion bar?
Of course you do and
that's why we
invite you to download our free study guide WRB
Analysis Tutorial chapters 1, 2 and 3 so that you can improve
your trading performance in comparison to your
trading prior to the WRB Analysis Tutorials...
Just
like most of our clients discovered it was the missing
piece of the puzzle to improving their trading and
understanding of the price action regardless if you trade
generic Japanese Candlestick patterns or advance Japanese
Candlestick patterns from our AJCTR via the WRB Analysis Tutorials.
For
more information about the free study guide...click
here.
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Basic Generic
Patterns (no trade management) |
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Advance
Custom Patterns with WRB Analysis |
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No Trade
Management |
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Trade Management
from Entry to Exit |
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Advance Japanese Candlestick Trading Report (AJCTR) These
strategies exploit repetitive price action that's explain in depth from
entry to exit via 75 pages of profitable trading via Japanese
Candlestick pattern recognition.
AJCTR is applicable for day trading, swing trading and position trading and is
about 75 pages. |
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Discussion Forum |
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Understanding Basic Japanese Candlestick
Patterns
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Best Regards,
M.A. Perry
Trader and Founder of
WRB Analysis (wide range body analysis or wide range bar analysis)
Price Action Only Trading (no technical indicators)
@
http://twitter.com/wrbtrader/
http://www.thestrategylab.com
Phone: +1 708 572-4885
Business Hours: 8am - 5pm est (Mon - Fri)
Skype Messenger: kebec2002
questions@thestrategylab.com
"Once a trend
starts, the odds are that it will continue. Every student of
science or engineering will recognize that this is nothing
more than Newton's First Law of Motion, which says, Every
body continues in a state of rest or of uniform motion in a
straight line unless it is compelled to change that state by
forces applied to it. Simply said, it is easier for a market
to continue its direction than to reverse its direction."
--Gregory L. Morris
"I
"In
all fairness...I give credit to these results to Niha and what I have
learned from him."
"
