An analysis of 37,000 candles was conducted across major currency pairs (EUR/USD, GBP/USD, USD/JPY, AUD/USD, and USD/CAD), identifying 200 valid Bearish Engulfings. What is the verdict?
Below is a chart that plots each Bearish Engulfing trend 20 days before and after its appearance. To make sure that every trend was in the same scale range, each BE was indexed to 100 as a starting point.
In the period leading into the BE, you can see how the trends were rising with a consistent pattern and range. Then, the day before the BE was always the peak. This is what creates the dip into the BE, which represents the close under the pre-candle. What happens after the Bearish Engulfing? The trends continue for 20 days and with each passing period, spread out in a cone or triangle-like fashion. The right side also exhibits a larger dispersion of than the left, with a wide range of peaks and troughs. At first glance, this speaks to randomness and pours cold water on the idea of Bearish Engulfings as consistent reversal signals. But we need to take a closer look.
. This means we can alternatively use a Cumulative Distribution Function to calculate the probability of a series in this sample finishing below the top. And just like with the results mentioned earlier, that clocks in at roughly 65% as well.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Crude Oil Price Outlook: Bearish Engulfing Confirmed, Retail Bets Start Shifting BalanceCrude oil prices have weakened over the past couple of trading days, pushing retail traders to become slightly more bullish. Meanwhile, a Bearish Engulfing was confirmed. Is oil at risk?
Read more »
Euro Price Action Update: EUR/USD at the Beginning of a Broader Bearish Reversal?The Euro closed at its lowest against the US Dollar since early July, with EUR/USD breaking under the 100-day Moving Average. Is this the beginning of a broader reversal?
Read more »
Gold Price Forecast: XAU/USD stays bearish below $1,925, US data, Fed Minutes eyedGold Price (XAU/USD) cheers a pullback in the US Dollar, as well as mixed the market’s consolidation ahead of the top-tier US data/events to portray a
Read more »
Canadian Dollar Outlook: USD/CAD May Extend Breakout Amid Bearish Retail TradersThe Canadian Dollar weakened to its lowest point against the US Dollar since late May. Retail traders are now increasingly net-short USD/CAD, offering a stronger bullish contrarian outlook.
Read more »
'Big Short' investor's billion dollar bet raises huge red flagsInvestor Michael Burry's latest SEC report revealed bearish bets against the economy.
Read more »
Leaked iPhone 15 USB-C components image reveals mystery 3LD3 chip that may limit functionalityAlleged charging components images indicate Apple has made a new chip to limit the iPhone 15's USB-C port's functionality.
Read more »