USDSGD Fires Off Huge Engulfing Bar to Break Price Flip Support | 19th June 2015

The USDSGD has fired off a huge Bearish Engulfing Bar (BEEB) on the 4 hour price action chart. This Bearish Engulfing Bar has smashed lower and through a major daily price flip support that price in recent times has really respected.

The really two important things to note about this BEEB are both how strong it closed and the size and momentum of it. Where engulfing bars close are super important because especially if we are going to be using them as a trigger signal to enter into a trade we need to make sure that the engulfing bar closes as strong as possible in the way that we are looking to trade.

For example; if we are looking to trade a Bullish Engulfing Bar (BUEB) we want to see its close as strong as possible towards the high and for a BEEB, we need to see its close as low as possible. A good rule is that we need to see the close at least in the last 1/3 of the candle/bar in the direction we are trading.

The other super important factor is where price can and cannot close as this tells us a heck of a lot about the overall price action story especially in relation to the support and resistance area and the major price flip points. We often see price flirting with areas, but it is not until we get that strong close out that price has broken the level. You can read an in-depth lesson about this and how you can know when price has either broken above or below here;

The Secrets Traders Can Read From Candlesticks & Price Action

We can see this on the daily chart now of this pair. Price has broken lower and closed below. This now could present high probability potential trading opportunities for traders to look to get short should price make a retrace into the old breakout area and new resistance.

You would need to watch the price action to make sure that the new resistance is going to hold as a resistance and to also watch for an A+ bearish trigger signal such as the ones we teach in the price action courses in the Lifetime Members Area.

Daily Chart

4 Hour Chart

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