Hey is it going guys Genna here and today we have a new video with a new strategy if this is the first time you’re in this channel subscribe and click on the bell icon to receive notification about my future videos and if you want to join my telegram channel and get for free signals just check description down below and once it will get into the telegram channel you will find as well the link over telegram group where we are building an awesome community where we trade and we’ll discuss about trading every day I hope you will enjoy this video today I will teach you the bullish engulfing strategy the bullish engulfing pattern is a reversal pattern if there is a bearish retracement it can change the direction to bullish in other words if the market price is going down after this pattern in might go up and because of that it’s very important that we do make sure that in that moment we have an uptrend the reason for that is that if we want to bet for higher we need to make sure to follow the trend direction and for this reason we only need solid uptrends but let’s see how it looks like the bullish engulfing pattern requires at least three red candles if there are more it’s fine but a minimum amount is three after the series of red candles we need a green candle the green candle has to cover completely the last candle and at least one third of the second last candle as you can see in the picture the green candle is covered completely the candle number three and at least one third of candle number two and for this reason this is a valid bullish engulfing pattern in this slide I will show you four valid bullish engulfing formations keep in mind that in each example there are only two red candles but you need three or more the first one is like the one we saw in the previous slide so the green candle covers completely the last red and it covers at least one-third of the second-last red candle the second one is a gap down candle now a gap down is when the price falls down in the same moment a new candle is created and for this reason the open price of the new candle which is the green one doesn’t match the close price of the previous candle so that’s why it’s called gap down candle so we do have a gap between the close price and the open price of the two candles and these are very strong engulfing because not only covered the candle but as well it covers the shadow of the previous candle so the the green candle it covers completely the red candle it covers one third of the second-last red candle is a very strong pattern now the third one is a hammer and after the hammer we have an engulfing here it doesn’t really matter if we have a gap down or not even without a gap down this is a very strong pattern because not only we have hammer and the hammer itself is a reversal candle but we have an engulfing so of the fourth this is the strongest one last example is like the first one with difference that the green candle it’s way bigger now as I told you the minimum required is to cover one third of the second-last but if it covers completely the second-last or even more it’s okay is still an engulfing pattern so the first example is the weaker and the second best is the fourth one and the second one is the third best and the strongest one is the third one so the third one which is the hammer formation with the angle thing is a strongest sign so let’s go to the next slide for beginners sometimes it’s hard to tell what is a valid bullish engulfing and what is not and in this slide I will show you what is not a bullish engulfing now in the first example you can see that the green candle is smaller compared to the last red candle but even if it was the same size this is not a valid bullish engulfing because the green candle doesn’t cover the second-last red candle for one third of its size so this is not the second example we do have a gap down green candle but the sides of the candle is pretty much like the last red candle and for this reason this is not a bullish engulfing either the third one is a very unique example because some traders trade this kind of information but I will explain you why so first of all let’s say that this is not a bullish engulfing because the green candle and it’s pretty much like the sides of the body of the hammer so it doesn’t engulf this candle so I told you that some traders do trade this pattern and the reason for that is because when you do have a hammer and afterwards you have a green candle you use the green candle as confirmation that the market is going to change the direction so you would trade based on that but not based on the bullish engulfing strategy now let’s talk about the time frame you want to trade the strategy the one minute time frame so based on one minute candles with one minute expiry it works okay but I wouldn’t suggest you to use this strategy in one minute time frame because in one minute candles sometimes the price it’s very hard to to manage and it can spike up or it can spike down in a moment a few seconds and on top of that you need to think about how other people trades most of the people they don’t really check for the one minute time frame people usually start from from five minutes timeframe to higher the most used one in one hour but obviously we are not going to use this kind of time frame trading because for binary option would be very difficult to manage but this strategy works better for five minutes time frame so we’re gonna need to have five minutes candles and the the expiry has to be for five minutes so if we take now the trade you need to expire after five minutes and this is the perfect time frame for this strategy we are almost ready to start training but let’s set some rules for this strategy first of all we need to check for the up trend we need to check the trend and we need uptrend if we have a Down trend or a sideways then we are not going to trade but if there is an uptrend we have a starting point so after we see that there is an uptrend the next thing to do is to check if there are three red candles at least so three or more and keep in mind that each candle is a five minute candle so the number one is five minutes the second one is five minute the third one is five minutes and the green one is five minutes so we are trading on five minutes timeframe and after we do check for that we need to make sure that the bullish candle which is the green one and the last red candle one at least one of them touch the last band of the bollinger bands and this is very important for our strategy so make sure that there is a touch and if there is not a touch they need to be very very close to at least be at the point to be touching and after we check for that we need to see our oscillator indicator and what we want to see is that the two lines are going to low so they need to be very close to the 20 line and the reason for that is that if we have this kind of indication it means that the market at this point is an oversold a condition so it can increase our chances to win and it’s very important that you do all of that and if one of those conditions are not happening then it’s not the right time to trade so I make sure to follow all these steps every time before to start a new trade using the engulfing bullish strategy it’s time to understand again why you want trade bullish engulfing patterns only on uptrend now you can see on my screen that there is an uptrend so the price is making higher highs and then higher lows and again another higher highs and another higher low and so on and an uptrend is a trend that follows this rule so higher highs and higher lows and you’re gonna gonna see these kind of waves going up now the reason why you want to trade bullish engulfing strategy only on uptrend is because on uptrend the chances that the price is gonna increase are higher so as you can see there waves so let’s start from the first rectangle Foursquare the Red Square you can see afterwards the price goes up after he gets to the point where it makes the first higher highs and then the price goes down now when the price goes down is gonna make the red candles we’re gonna need for our strategy to work and in the second rectangle if you’re gonna see after three or four or as many red candles there are a bullish candle bullish engulfing candle at this point you’re gonna have your entry sign to buy and go higher in the market and then it’s gonna happen again it goes up until you reach the next higher highs and then the price retrace down and it’s gonna make another higher lows and when you’re gonna go down is gonna make red candles and this point he wants to see another engulfing bullish candle and if it’s gonna happen you have another entry point to buy so for a higher and this is how you want to trade them you want to trade them in uptrend condition and you don’t want to have a side way or you don’t want to have a downtrend because in a downtrend the chances the price is gonna fall further down are more so this is why this is very important to trade in uptrend so remember bullish engulfing strategy works with up trends alright so now let’s check this strategy on a one-minute chart and in these charts every candle is gonna last for one minute and we’re gonna trade for an expiry of one minute so as soon these candles gonna stop and the new one is gonna start we’re gonna start the trade and it’s very obvious they’re in here we met all the condition the the oscillator is touching the band in the in the oversold line and the red candles okay one second let me take this trade all right okay and I was saying that the red candles are touching the lower bands of the bollinger bands now it’s not really important that all of them touch it but we actually need to see at least last one or the the engulfing can to touching the lower band of the bollinger bands and so would you have an uptrend in this occasion and then we add the three red candles we have a very good bullish engulfing candle because it covers the first one I mean the last red candle the second last and partially the first red candle so I’m pretty confident we’re gonna win this one and as I was saying I believe this strategy works better on a 5-minute chart but to be fair it works fine as well for the one-minute and it depends really on you if you’re willing to wait a little bit more and trade on five minutes okay we won it great all right so what I was saying that you’re willing to wait a little bit more maybe it’s better but now let’s test the strategy on a five minutes chart I realized that five minutes long trade for the video purpose was too long so I decided to speed up the video and – voiceover because otherwise we had to waste a long time but here’s really it’s very simple okay first of all in here every candle is a five minute candle because we are in a five minute chart and the trade is gonna last for five minutes alright so let’s check for all the condition for us to start the trade first of all we can see the oscillator the lines are touching the 20 which is the oversold line and the candles are touching the lower band of the Bollinger Bands and we do have a very good entangled in candle a Polish one on a hammer which is a very good sign that the process gunner is gonna reverse and it doesn’t really matter for how much you’re gonna win the important is that we are going to win and that’s the point of this strategy after this candle is going to make always another green card all right so let’s do something fun let’s go back in history and let’s check the strategy how many times we’ll be working so I would say 20 times let’s look for 20 20 possible trades you’re gonna notice is this is a five minute time frame chart and I really believe that this is the best time frame for this specific strategy or there is something to take in consideration is that we actually don’t know if during the moments we’re gonna check for this kind of trade if there were news if there were problems with some kind so but still let’s think about like everything was fine no problem and working so here’s the first one nice not and because well first of all we don’t have an engulfing candle here and then we don’t didn’t suffer any sign here that it was a good idea to take it but here yes here it was a good one and this one would be a winner so one I’m not sure about this one probably yes probably yes just because we have a touch here we have a touch here and I mean I’m only sure if it would be taking this one because well yes it doesn’t go this one in some part of this one I mean it starts to tell but probably yes and it’s a winner because the candle after this one is green and here we have a downtrend and this one is not but this one is and this one would be a winner and we have again one two and three so we have the only trade confirmation so this won’t be a winner and here yes it is one two and three so we have all the three confirmation and we would be taking the trade here and we winning that trade here up to five minutes so it’s four times here it’s very messy and we wouldn’t take this one because we didn’t sell the conformation here and we didn’t set a conformation here because none of these two candles touch the lower band of the Bollinger Band and of course we saw that in dodgy ladder the line didn’t reach the whole result line and we will be taking this one yes why because the one I mean they reach the lower bands of the Bollinger Bands where it’s the oversold line we have a very good angle thing will be taking the trade here and winning here so it’s another one so far we are five zero at this point oh yeah the uptrend actually continues so let’s see we wouldn’t stick this one because we didn’t have any we didn’t have all the three steps to get the trades so we didn’t set this one so this one was not so good trade I mean we wouldn’t take this one I mean I mean this is not even a go an engulfing candle so I’m not sure why I started to talk about this one well let’s move on to the next one would be take this one won’t you I mean there is a teaser dodgy I don’t think we’ll be taking this one should be fair because after a dodgy and we see this kind of candle like this that there’s a price rejection of the table it’s hard to tell but probably we wouldn’t take this one but let’s count it okay so let’s put it in the losers this one yes this one is a good one because we have a hammer you see so we have the comes we need we have a hammer we have the touch we have here another touch inertia layer and we have an engulfing and so that would be a winner here’s nothing and looks like it starts a downtrend and if possible I want to show you something about downtrend here okay that that is why I’m telling you that is not a good idea to trade them on downtrend because you see we have pretty much all the condition but because this is a downtrend after we have our engulfed in candle I mean even if it was a yeah it was uptrend Oh probably would take this one but sorry as you can see after the green candle there is a red one and why because the trend is that is going down now so I don’t think I mean that’s why you don’t have to do that in the until out in the downtrend right let’s check for another all right here uptrend alright so we have a downtrend it’s not a downtrend refreshment we are one two we have all the confirmation we need the we have the engulfing candle and then we win sighs another winner here one and golfing three he’s a winner here we don’t have anything because this is nothing this is not an engulfing this one is not the winner and it’s not something we would be taking because there are only two candles nothing here it would be wouldn’t be taking this one and we probably not we wouldn’t take this one either now it may be yes the reason because we have a hammer here even if we don’t serve a very good sign that this is gonna touch it there’s a hammer and I explained you earlier that this is the best option we have so in a golfing candle on a hammer and there is an inverted hammer before so yeah I think it would be taking but I would not count this one so but yeah here yes we would be taking this one because touch touch we have a retracement then golfing candle and the next one will be a winner so far we are nine winning winners and one lose this one is not an angle thing and it looks like it starts to be in the downtrend yeah I’m not sure what happened here probably news and that’s why I don’t want to try it during news I assume that it was that it was a tenuous but I’m not sure yeah uptrend this is not a bullish nothing oh yeah here we probably would take this one because it’s not really a hammer but he’s a kind of candle that tell us that try really hard to reach a lower price there was a rejection and then we have a touch we have a touch here in the Toshi later we have an engulfing yeah we will be taking this one so far ten winners one loser here there’s nothing there’s no engulfing whatsoever nothing let’s try on ero USD let’s switch to five minutes and the euro it went down a lot in the past week so I’m not sure if we’re gonna find any good uptrend while here is it’s a really a great uptrend it doesn’t look like I don’t know look the uptrend looks like it starts in this section but here it’s kind of sideways so I don’t know well yeah so we do have an engulfed in here and we have a winner so on I’m golfing here we have all designed it’s gonna race it’s a winner here is not single thing here is not sitting golfing here is not here it is it looks like yes it is so we have mostly sign we don’t have a touch and I think we will be trading this zone it’s a winner here we don’t have anything anything nothing Ania looks like is going down trend so let’s go back and check for another half trend here here we that we have one it’s very hard to tell
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