Breakout Trading Strategy (Using The Engulfing Candlestick Pattern)

Breakout Trading Strategy (Using The Engulfing Candlestick Pattern)


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youtubers and welcome back to my subscribers in this video we’re going
the breakout trading strategy also we’re covering how you can use the breakout
and the retest and which ones are the best to use with your trading so let’s
head over to those charts with a start going through understanding how to
identify where a breakout may occur understanding the trend of a market ok
so when looking to take a breakout entry or even a breakout and a retest entry
there are a couple ways you can look for the retest over on a single candle
retest at the breakout area or you can look for a swing pullback retest and
before you can even look to take a trade using a breakout or a breakout and
retest you need to be able to identify the current trend of the market now the
reason this is important is because breakout trades are tending to happen
with the trend and also going to be more of a higher probability entry if you
take it with the trend now if you want more help with identifying trends there
is the free print trading course the was in the description this video and
that will help you y’all identify and Trent easily in the market I will go
through briefly now how you can identify trend there are few ways you can
identify a trend one you can mark off the current highs and lows in the market
look for an uptrend or you can mark the lower highs no lows in the market to
identify downtrend so always identify this uptrend we can
see visually from this here in the chart to this area price has been going up so
we can easily see it’s in a bullish trend but if you didn’t have all that
information price was resuming me around here in the market we can then start
marking off the highs and lows to the L just see that price is actually up
trending so we know the market is in uptrend the third way you can look for a
train is you can add any email to the chart it was above the email you’ll be
looking as a bullish trend if it’s below that EMA you’ll be looking at a bearish
trend now there is a free course that’s just been released on the site the link
is in the description and it’s all about using dynamic area of support resistance
so if using emails on the chance to trade web is something interest you and
you want to look at using emails to trade with but not sure how check out
that free course because that will help you to have a great strategy to use in
the markets now obviously the best thing to do will
be a basically to learn to trade just using price action as I’m demonstrating
now today so the next step once you identify that trend they need to
identify areas of consolidation or price patterns where prices most like to build
up for having pressure to basically breaking out in the direction of that
trend and once you find those areas they need a candlestick pattern which will be
using is the engulfing pattern to look for a track now the reason I use the
engulfing pattern because is the number one pattern which will give you the
highest success rate when looking to take breakup entries
now we have to pop down to the four hour time frame to demonstrate an entry of a
breakup but on the hill the daily there is any golfing candle we can demonstrate
with engulfing candle it’s this bullish candle on the chart then go from Kendall
needs to engulf the previous candles high to low range and normally you will
see the previous candles body engulfed by the engulfing candle as well of its
body as you can see the body of this candle engulfs the previous candle as
well they are the best-looking engulfing
candles there is also a pin engulfing now there is what I’m gonna demonstrate
right now on an entry of a breakout which is in fact a pin engulfed in
candle so when you’re using all this together using the right candlestick
pattern at the right time the market going with the current trained then this
is gonna give you a high probability chance of a successful trade
now these engulfing candles can also create an area of supply or an area of
demand now you’ve obviously gone through my
videos of supply and demand trading I’m not talking about an actual area of
supply or an area of demand but these candles can create an area of demand
from the candlestick as it continues higher there’s a reason why price turned
through this ear on the chart because it creates in the area of demand no not on
this candlestick but perhaps on the lower timeframes and this is why we see
this rejection on this candle it drops back down fine spies an area of demand
to the market and then rallies away and this candle in fact is a perfect example
of a pinning golfing candle that’s called the pinning golfing because it’s
a pin bar but also engulfs the previous candle now some pin barb a rejection of
the lows with a smaller body and a small wick to the upside and it engulfs the
previous candle so that candle and itself when we
price breaking above the highs of these candles is a perfect time to look for a
new law now if we go down to the four hour time frame and then going to
demonstrate and held to look for a trait using this time frame first we’re going
to identify that trend from the lower prices as price comes up pair we create
and make a high-low in the market and when we remove that high right there is
when we’re starting a new up training market now as well as that we also have
a previous area of consolidation where price has been moving sideways it fails
the breakout and then eventually we break out we pull back we retest and we
continue higher so yes there is a valid area of a breakout a retest continuation
now a retest can be over a swing retest in the market which is what you can see
on the chart now probably more on the one hour and they retest me single
candle never go to daily timeframe you will see that retest we have this area
of consolidation we have the breakout candle we have the single candle retest
and then price continues higher so what I talked about retest I’m not always
talking about swing retest sometimes I’ll be talking about a single candle
retest and that candle will drop down into the retest of the highs of prices
and then most probably turn into a bullish candle in this example to do
with that current trend now look at that example to this area where we have the
breakout of the bearish candle but then we have a bullish candle
coming back into the zone and then eventually price continues higher now
many traders will look to go down to lower timeframes but it’s not always a
good idea to go and try and find and enter no time thanks not where you can
actually see from this daily timeframe how simple it is to see the breakout the
retest and it continues higher than the raintree where on this one we see the
breakout the retest and then we’re going to take an H on that candle and price
continues higher so that is the retest part you need to see the clean bullish
breakout on this example we didn’t we had a nice clean break out to downside
but we didn’t get the retest well this time we had the clean break hell we have
a nice retest on that indecision candle ain’t real real the break of the high
and that would have been with the current trend let’s weave the trend
because we had the rally we had to move sideways and then we had the
continuation of the trend now I’m gonna put the breakout entry instead of the
retest we’re going to be using the engulfing candle as we went through on
this daily timeframe back into that four hour time frame again when we see price
this time breaking out of this area we have a nice bullish engulfing candle to
the upside now this isn’t the perfect sample want to show you I want you want
to see an engulfing candle more breaking at this area so you see the candle
coming from the zone and then engulfing the candle before the break out this is
still a bad breakup but we go down to the one-hour time frame you’re going to
see a pin engulfing candle and the pin engulfing candle is this canned on the
chart we have engulfed the previous candle of the body and from the high to
the low so this would be a valid break out of
this zone for an entry on the lower timeframe off that single candle and
price heads higher now we do get a swing pull back this time to retest here we
have a two kind of reversal off this breakout point and price continues
higher now there’s the two options you can trade a breakout entry we have a
single candlestick breakout an engulfing candle or pin engulfing or you can look
to trade the break-up retest when you’re looking for a clean break out of the
level and then the next candle you’ll be looking for that retest with a
continuation with the trend let’s recap what we’ve gone through in this video
one you need to be identify the trend in the market making sure you are trading
in the direction of the trend will give you the highest probabilities if you try
to trade against the trend I’m gonna get caught into those positions where you’re
most likely to lose we look at how the market moves when we move in the uptrend
is solid strong bullish momentum we then move choppy sideways we then have
another strong momentum to the upside with the end start to move sideways and
again we have another strong bullish mode now they are the areas in the chart
where you want to be catching your traits they’re going to give you the
most potential profit and when you only look for an entry it’s simple to look
for a daily timeframe entry for this single breakout and a retest if you use
this area on the chart we can now see price has done a swing pullback we
basically broke out we pushed higher we stayed we made a new high-low in the
market on a single candlestick we broke out and no price is pulling back to the
previous highs where we look for that break helped swing retest so hope you
can see the difference between this retest
and then this single candle retest so when you bring all this together this is
what’s going to help you become a consistent and profitable trader using
price action with the breakout or the retest in your trading so which one are
you going to look to trade are you gonna trade the break-up retest for single
candle are you gonna look to trade the breakout with a swing retest when entry
or are you in fact not even going to trade the retest and just look for those
golfing candle breakout entries to catch the momentum as it continues on with a
trend I hope you’ve enjoyed today’s video with this price action trading
video on using the breaker or the retest in your training if you’re not already
subscribed to channel and will it catch more videos like these make sure you hit
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