When trading using the Engulfing Candle method, assume one enters a trade based on the appropriate candle and confirmation signals. Two or three candles later, another perfect engulfing candle emerges and confirms but in the opposite direction. What actions are most appropriate to this situation?
You can't rely on one indicator only for a trade, often it is too misleading. That's why thre are so many of other indictors, you look for confirmation from the other sources as well. What are moving averages doing, macd, resi/stochi etc. Read on before committing a financial suicide.
if I get a opposite signal in the SAME system, I reverse.
As for needing more then just a candle .. not at all, when I use engulfing I also use 7 and 21 SMA to give direction and only trade in the direction - but that's all. Further I also trade ALSI using just, bid/offer/last/volume and 15 minute candle - no TA at all.
Hi Simon.Just putting my head in the door for a quick question.I plotted what you say( I like it.It's easy,relaxed.)...and does that mean you wait for a reversal after the engulfing Candle and then enter ? And...do you rollover to the next day, if 7 stays above 21 ?
Problem though is that SMA's on easy trader do not carry over from the previous day. To get a 7, never mind the 21, period on a 15 min chart, one has to wait till midday or later. On a 5 min chart it only shows at about 10h30. So how does one sense the trend without this crucial info?