7# Bearish Engulfing Pattern Trading System

On this EURJPY chart we had two bearish engulfing patterns occur at the

Daily resistance. The first occurred on November 8 after a Doji indicated a

change in investor sentiment this was followed the next day by a bearish

engulfing candle confirming the change in trend. The trade was entered at the

open of the next candle at 114.191. The trade hit the Take Profit placed at

Daily support on November 12 for a profit of 300 pips. The stop loss was

placed just above the previous Doji at 130 pips.

The second trade occurred when a bearish engulfing candle failed to break

the Daily resistance at 114.73. I entered the trade at the open of the next

day’s candle on November 23 at 113.531. The trade hit Take Profit the same

day when it hit the Daily support for 240 pips. Stop Loss was placed just

above the previous candle at 140 pips.

In this example a Doji candle formed on May 4 at a support at .8982. The

next day saw a bearish engulfing candle where the wick touched both the

Daily and Weekly resistance. The trade was entered at the open of the next

candle at 0.8870. The Stop was placed above the previous candle at 0.9047

for 180 Pips. Take profit was set at 0.8671 for 190 Pips.