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THE CANDLESTICK TRADING BIBLE
The chart above shows a bullish trend, the trend line acts as a support
level, the price action signal that occurred created a great buying
opportunity.
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THE CANDLESTICK TRADING BIBLE
How to trade the engulfing bar in sideways markets?
One of the most difficult markets to predict can be the sideways and
ranging markets, i always recommend traders to focus on trading
trending markets, but the problem is that the markets spend more
than 70 % of their time in ranging motion.
If you focus just on trending markets, you will probably leave lot of
money on the table, this is the reason why learning how to approach
range bound market is a must if you want to make decent living trading
financial markets.
What is a range-bound market?
When the market stop making higher highs and higher lows in case of
an uptrend or lower highs and lower lows in case of a downtrend, the
price starts acting between specific high price and low price.
This is a clear signal that the market is ranging and no longer trending.
See the illustration below:
As you see in the example above, the market is trendless, it is trading
between horizontal support and resistance, and you can’t apply the
same techniques that you use in trending market to trade engulfing
bar patterns in range bound markets.
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