WEBVTT 00:02.990 --> 00:08.220 This video is going to feature bullish and bearish and golfing candles. 00:08.270 --> 00:12.040 So this is a two pattern to Candlestick pattern. 00:12.530 --> 00:21.060 Essentially what you have is you have a candlestick that gets followed by a much bigger candlestick 00:22.100 --> 00:24.200 whether it's bullish or bearish. 00:24.200 --> 00:28.870 Depends on what the trend had been previously. 00:28.870 --> 00:35.530 So for example what you're looking at here is one of two things depending on the colors of the candlesticks 00:35.900 --> 00:45.500 you're really looking at a downtrend which the next day may have gapped lower and then shot much higher. 00:45.500 --> 00:46.760 And think about what that does. 00:46.760 --> 00:54.050 That wipes out the sellers from the day before and most of the time a couple days before if it's a truly 00:54.050 --> 00:59.000 large engulfing candlestick it'll do a lot of damage in a very short amount of time. 00:59.060 --> 01:07.630 You know you gap lower and the market just turns right back around that scares a lot of people who are 01:07.760 --> 01:09.090 short. 01:09.110 --> 01:18.600 If we're going long and it ends up being a bearish candlestick this would be red then it's a rally you 01:18.610 --> 01:23.690 get a quiet day you get a gap higher so everybody's happy because I think it's going to continue and 01:23.690 --> 01:30.280 then all of a sudden something horrible happens to price action and you wipe out several days there 01:30.430 --> 01:35.680 does need to be a gap though because the second candle needs to engulf the other one so it has to be 01:35.680 --> 01:42.730 higher and lower than the previous candlestick on this chart here of Yelp. 01:42.730 --> 01:46.190 I've got a couple Bullish Engulfing Candlesticks. 01:46.450 --> 01:50.380 You can see that clearly swallows the candlestick before and so does that. 01:50.440 --> 01:51.400 So how do we trade it. 01:51.460 --> 01:56.410 Well the stop loss goes on the other side of the candlestick because if we were to turn around and wipe 01:56.410 --> 02:03.020 out this candlestick that would be a very negative sign as far as the entry is concerned it's just simply 02:03.020 --> 02:10.550 a break of the candlestick and you see both times it's worked out for nice profitable trading afterwards 02:11.970 --> 02:18.600 with the berries candlestick and this isn't as extreme of an example but it certainly is a valid one. 02:18.630 --> 02:23.700 You can see that we had a couple of candlesticks here that got swallowed by this one. 02:24.180 --> 02:31.020 And what I also like about this is that there is a shooting star right here and then this. 02:31.270 --> 02:37.540 So on a break below the bottom of this candlestick your stop loss is above this candle and you continue 02:37.540 --> 02:48.580 to go lower and these happen enough that you see them quite often on charts. 02:48.580 --> 02:54.670 Now there I don't want to say they're common. 02:56.230 --> 02:58.060 Reasonably common there. 02:58.090 --> 02:58.830 They're not. 02:58.870 --> 03:02.660 I wouldn't call them rare because they do happen. 03:03.640 --> 03:09.310 But when you look through daily charts a lot of times you'll see them pop up and then you look back 03:09.310 --> 03:10.390 at the chart and go Oh yeah. 03:10.390 --> 03:12.350 There was a reversal area there. 03:12.370 --> 03:15.940 And you know in hindsight it's always 20 20. 03:15.940 --> 03:20.890 That's the thing about these things you have to trust the patterns you have to know that over time they 03:20.890 --> 03:22.340 work out. 03:22.990 --> 03:25.400 There's a slight one there. 03:25.390 --> 03:25.960 This 03:32.410 --> 03:37.140 chart here shows quite a few close like for example. 03:37.150 --> 03:40.540 This is close but no cigar. 03:40.600 --> 03:47.700 This would be a bullish engulfing candlestick not my favorite kind though because I really like to see 03:48.180 --> 03:55.200 the more pronounced it is obviously the more interesting it is because you wanted to a cat to catch 03:55.620 --> 04:02.460 enough people's attention that the market moves right along with you you know there are enough people 04:02.460 --> 04:07.730 out there going Hey this is a cell signal like this city one was pretty negative your stop loss goes 04:07.740 --> 04:14.370 up here you've got all the way down to the previous resistance level before it turned back around you 04:14.370 --> 04:17.020 know you also want to when you trade these. 04:17.040 --> 04:25.710 So this is a perfect example of one that although it is a nasty bearish and golfing candlestick you 04:25.710 --> 04:31.680 would know that somewhere right here around 70 you're probably going to see some buyers due to the previous 04:31.680 --> 04:33.020 resistance. 04:33.030 --> 04:39.560 Well at this point this is a candlestick that makes you risk three dollars and 90 cents to pick up two. 04:39.590 --> 04:43.130 So that's not a trade. 04:43.190 --> 04:47.260 I mean it's doable but the risk of reward just isn't there. 04:47.300 --> 04:53.330 Clearly though with that volume that probably attracted a lot of people I suspect that they probably 04:53.330 --> 05:00.890 shorted it took some profits based upon some news or something but that is an example of looking at 05:00.890 --> 05:03.680 just the candlestick and how much trouble it can get you in. 05:03.680 --> 05:08.480 This is technically a bearish engulfing candlestick but look at all of this support just below. 05:08.480 --> 05:14.060 So do you really wanted to risk a couple bucks to pick up say 50 cents and now you have to use some 05:14.060 --> 05:21.650 common sense but they are excellent signals when they do happen especially when you have some room to 05:21.650 --> 05:22.600 run. 05:22.640 --> 05:33.050 I like them when they show up and at various extremes so with that being the case take a look on. 05:33.110 --> 05:39.100 Typically the the daily charts you will get them perhaps on an hourly chart at the open. 05:39.440 --> 05:45.440 But this is generally a daily or even weekly signal that people will use to determine the trend. 05:45.440 --> 05:50.990 And then if they are shorter term traders use it as a guideline as to how to enter the markets.