This article is about one of the configurations of price action Forex most powerful and reliable available. It is the Bar Engulfing Bullish and Bearish. Some traders call it bullish or bearish outside bar. When playing from the right and with the knowledge of how to use it correctly areas, the envelope is a tool bar action prices extremely useful to have in the arsenal of the trader.
Acronyms bearish and bullish engulfing for bar are beeb and BUEB.
Structure Engulfing Bar:
The envelope bar, as indicated in its title, is formed when "engulfing" completely the previous candle. The envelope can engulf bar over an earlier sail, but to be considered a shell bar, at least one candle should be consumed completely.
Where traders often confuse it with the bodies and the wicks of candles, but what traders only need to remember is that; envelope bar should have a higher height than the previous candle and a lower low. This takes into account both strands as the bodies of the sail, and while the high is higher and low is lower, then completely absorb the previous candle and is valid.
An example of a valid surround bass bar
An example of a bullish gobbled bar
When we search bars surround we seek large and very obvious protruding bars. The larger the bar Engulfing better to negotiate, because the bars are bars Engulfing momentum, and we want to trade with momentum on our side. The larger the bar, the greater the momentum!
Not all bars are interchangeable surround signals and this is where the knowledge of where to look is absolutely key. 2 basic criteria to be followed for a Engulfing rod is a rod Engulfing are interchangeable:
1: must be large and obvious,
2: must be formed in a balance point.
Those are only two basic things you should consider when evaluating a wraparound bar. When I say that the envelope bar should be formed at a point of oscillation, I mean if in an uptrend must be formed at a low swing or a downward trend must be formed in a high swing. This is absolutely critical to success with the surround bar!
The other main point for operators monitor their envelopes bars is where the envelope bar closes at the end of the session. Best envelopes bars close in the last third of the sail in the direction that negotiations will take place. For example; if an upward surround bar, then the best surround bars be closed upward in the upper third, indicating that the price has been tightly closed. This indicates that the price has been tightly closed in the direction the trader wants to operate.
Example surround high quality bar
When combined time frames high as weekly and daily charts, and is used with the correct money management, Engulfing bar can be a tool very reliable and profitable Forex that every trader should have in their arsenal.
The next step for the trader is to learn where to play the best places in the graph of encirclement and then the art of managing trade properly once you have entered. Not all bars are created equal envelopes and only because it has formed a wraparound bar, does not mean that the operator should automatically enter the operation. This is the next step in what the trader needs to learn.
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