When this happens many traders believe it is a sign that a trend has just finished and this is the best possible entry point. That’s the theory but as we know the market doesn’t always answer to predefined rules.
That’s why David Jones includes real examples alongside the theory behind these specific chart patterns. You’ll also see different time frames discussed in terms of how often engulfing candles can happen, as this is an important factor when deciding if you should trust the pattern in different situations.
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