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December 11, 2017

Question:What is Engulfing Patterns of Japanese Candlestick charts on MT4?

Answer:

A long white candlestick is formed at the end of a downtrend, preceded by a small black candlestick.

The body of the small black candlestick is completely engulfed by the body of the long white candlestick.

The bearish pressure of the prevailing downward move, is overcome by the buyers entering the market aggressively at the end of the decline. This forms a long white candlestick with bullish implications.

During the course of a downward move and while prices fall lower, the presence of a smaller black body signifies that shorts have second thoughts on maintaining the bearish direction.

While the bears show signs of weakness, the bulls enter the market aggressively as they are lured by the attractiveness of prices.

As demand is higher than supply, and sentiment shifts to positive, prices climb to higher levels.

 Supply/Demand Demand is greater than supply.
 Sentiment Positive.
 Direction Bullish.
 Trigger Consider buying if next candle exceeds the high of the long white candle.

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