One rule for trading that I use is never be on the wrong side of an engulfing bar.

They are hazardous to your account.

On the other side of the coin, they can be very effective for entry criteria.

The importance of engulfing bars gains if it comes after a directional move.

For this bar to occur it must reverse the previous move from a new high and close below the low of the previous candle.

This requires a significant change in value perspective.

Engulfing bars.jpg (165.02 kb)