Original subtitles

0 Hello and welcome, guys, to the next lecture where I will introduce bearish engulfing and bullish 1

engulfing candlestick patterns to you. 2

Unlike shooting star and hammer, engulfing patterns consist of two candles where second candle engulfs 3

the real body of the first candle in the pattern. 4

A bearish engulfing pattern is the sign of bearish sentiment as the real body of the second candle in 5

this pattern engulfs the real body of the first bullish candle. 6

Similarly, a bullish engulfing pattern indicates buying strength and thus bullish sentiment as the 7

bullish candle engulfs the entire real body of the first bearish candle. 8

Now, let's understand these patterns using illustrations. 9

Bearish engulfing pattern signals the selling strength in the prevailing market as buying strength weakens, 10

which is reflected in the strong, bearish candle. 11

Sellers are overcome by buyers, and the second candle in a bullish engulfing pattern reflects this 12

price action. 13

As you see here, both candidates must be of opposite color to validate the pattern. 14

Please note that it is always the second candle which engulfs the real body of the first candle. 15

At the same time, it is not necessary that the tails or wicks of the first candle to be engulfed. 16

Guys for both engulfing patterns, you will always analyze them while keeping the below guidelines in mind 17

to filter high profit versus low profit opportunities when these patterns appear: 1. whether bullish 18

or bearish engulfing patterns appeared after a clear uptrend or downtrend. 19

This means that the importance of the pattern increases when they appear after a clearly defined trends 20

in the market. 21

Whether these patterns are also associated to key support and resistance zones on your trading charts. 22

If this happens, you are able to trade these patterns with increased confidence. 23

Now that you've understood these two patterns, let's study them further through some real examples. 24

Guys, here in the first example, we are analyzing daily charts of silver to study a 25

bearish engulfing pattern. 26

The first pattern appeared after an uptrend lasting for approximately 20 trading days, hence making 27

this pattern very significant. 28

Also notice candles of opposite colors in this pattern, and then price declined sharply over the next 29

couple of weeks of trading. 30

Similarly, another bearish engulfing pattern appeared on Silver after 30 trading days and at the 31

same resistance zone. 32

Notice, guys, the large bearish scandal indicating the large selling here and then price plummeted 33

in a sharp downtrend following this pattern before it came to a halt at a key support. 34

This is also very interesting and recent price activity on a daily chart of gold, the first bearish 35

engulfing pattern was at a resistance zone and gold price continued declining for more than 36

10 trading days. 37

And then once price reached the key support zone, a bullish engulfing pattern appeared, signaling 38

buyers entering in larger numbers at the support level. 39

Another bullish engulfing pattern brought back the strong bearish sentiment in the market, hence offering 40

another strong sell opportunity. 41

This is what I have been teaching you throughout the course that the candlestick patterns dictate a story 42

around these zones. 43

Moving on to the next example, we're looking at GBPJPY forex chart. 44

Once again, this bullish engulfing pattern came at a key resistance on a clear downtrend for almost 45

15 days, 46

Also ensure that the sellers are losing control of price at resistance zone. 47

And finally, Price rallied in an uptrend. 48

The final example in this lecture is of GBPCHF 49

The criteria remains the same as this zone was seen at a key resistance zone and large bullish candle engulfing 50

the real body of the bearish candle, indicating the large buying entering the market. 51

Guys, this also concludes this lecture, and I will see you in the next lecture. 52

where we continue studying other key candlestick patterns I use in this strategy.