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Secret Trading Tip #19 Candlesticks & Engulfing

Last time Larry Levin was a guest on the Traders Blog, we received a ton of great feedback. So, we decided to ask Larry if he'd be interested in sharing another one of his trading tips. Of course, he was happy to send over another. Today' tip is on engulfing patterns, a commonly found candle-stick setup. Be sure to comment with your thoughts and visit Larry for more trading pointers.

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Candlestick charts have all kinds of potential patterns that technicians are watchful for. One of the easiest to spot is an engulfing pattern. This set-up consists of two candlesticks, one of which is “engulfing” the previous one. That means the body of the second candlestick is longer than the first one. It doesn’t have to extend beyond the wicks of that first candlestick, just the real body.

Spot an engulfing candlestick and you might be seeing a reversal signal [Read more...]

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