The Power Of Outside Bar Or Outside Day (Engulfing)

Outside Bar/Outside Day (Engulfing): Rules (chart example is a bullish setup)

1) This bullish outside bar/outside day or engulfing candle means new buy or bullish money is coming into Forex pair

2) Price action encompassed the high and lower of previous days price action (chart: Fridays)

3) This candle happened on a Monday- mostly lowest liquidity and volume of the week

4) Next three days (Tues, Weds and Thurs) - gave you possible entries into this future bullish move

5) This Engulfing or outside bar/outside day pattern would have gave you 350 pips (profit/target) with a 100 pip stop loss or 1: 3.5 risk/reward setup.

6) This engulfing or outside bar/outside day pattern broke the price action (critical price level) of 120.000 on chart

This pattern is more reliable on hour, 4 hour or daily- but can be used on lower time frames of lower then hourly IF you see this at resistance and support, price action level of a round number, fib ret of 50% to 61.8%, etc... more confluences at one price and time would put the probability of profit on your side of trade.

Adjust risk management related to time frame you are trading on and ATR of the pair, this will keep 1% to 2% risk per trade the same.