Playing the Odds with a Bearish Engulfing
by Trader Rich
The graphic below is the weekly EUR/USD chart with corresponding candlestick patterns. As you can see, going into next weeks trading, we are following an engulfing bear. Care to play the odds that this week will see more bearish action? Since 1999, here are the pip profit/loss if going short for the week following an engulfing bear:
+51, +266, +21, +124, -58, +132, +38, +8, +11, +46, -10, +136
Out of 12 weeks, only 2 of the weeks were losing and they were small losses of 58 pips and 10 pips. The average profit was 83.3 pips over the other 10 weeks.
We could very well see another bearish week if we played the odds. I know I will be.