{"id":12483,"date":"2016-09-30T02:29:32","date_gmt":"2016-09-30T09:29:32","guid":{"rendered":"http:\/\/www.tradingheroes.com\/?p=12483"},"modified":"2025-08-12T15:56:07","modified_gmt":"2025-08-12T22:56:07","slug":"engulfing-candle-gbpaud-632-pips","status":"publish","type":"post","link":"https:\/\/www.tradingheroes.com\/engulfing-candle-gbpaud-632-pips\/","title":{"rendered":"Engulfing Candle Trade That Made +637 Pips"},"content":{"rendered":"<p class=\"p1\"><span class=\"s1\">Here is an Engulfing Candle trade that I took recently and I thought that you might find it useful to see the trade from front to back. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So in this post, I break down the thought process, order entry and exits on this trade. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I also review the trade to show you what I could have done better. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">To me, the best way to learn to trade is to see the process and the pattern before and after the trade. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">How many times have you gone back to see if a trader\u2019s prediction on YouTube played out? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I would guess, not many. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">That\u2019s kind of unfortunate because there is a lot to be learned between the prediction and the final result. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Therefore, I believe that it is much more beneficial to break down the trade after it\u2019s in the books. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Writing about my trades also helps me learn from my trades. Everything is verified and I provide the proof. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Anyway, here\u2019s a video breakdown of the trade. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">The text version is provided below the video.\u00a0<\/span><\/p>\n<div align=\"center\"><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/sD6cg5G8kxw?rel=0&showinfo=0\" width=\"853\" height=\"480\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/div>\n<h2 class=\"p1\"><span class=\"s1\">Reasons for Taking This Trade<\/span><\/h2>\n<p class=\"p1\"><span class=\"s1\">It is usually\u00a0easier for me to take trades that go with the overall trend, than to try to buck the trend.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Other traders prefer countertrend trades. I will take countertrend trades, but I\u2019m much more selective. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So in this case, there was a very clear case for a downtrend in the GBP pairs. Let's analyze this from the top down. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Here is the weekly chart for the GBPAUD. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">There is some room to the downside and price looks like it is taking a break before another leg down.\u00a0<\/span><\/p>\n<p class=\"p1\"><a href=\"https:\/\/www.tradingheroes.com\/wp-content\/uploads\/weekly-gbpaud.jpg\" target=\"_blank\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-12488 size-full\" src=\"https:\/\/www.tradingheroes.com\/wp-content\/uploads\/weekly-gbpaud.jpg\" alt=\"Weekly\" width=\"900\" height=\"358\" srcset=\"https:\/\/www.tradingheroes.com\/wp-content\/uploads\/weekly-gbpaud.jpg 900w, https:\/\/www.tradingheroes.com\/wp-content\/uploads\/weekly-gbpaud-768x305.jpg 768w\" sizes=\"auto, (max-width: 900px) 100vw, 900px\" \/><\/a><\/p>\n<p class=\"p1\">Next, the entry signal was an <a href=\"https:\/\/www.tradingheroes.com\/forex-price-action-guide-to-outside-bars\/\">Outside Bar<\/a> on the daily chart. Some traders\u00a0also call this an Engulfing Bar.<\/p>\n<p class=\"p1\"><a href=\"https:\/\/www.tradingheroes.com\/wp-content\/uploads\/signal.jpg\" target=\"_blank\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-12489 size-full\" src=\"https:\/\/www.tradingheroes.com\/wp-content\/uploads\/signal.jpg\" alt=\"Outside bar\" width=\"900\" height=\"358\" srcset=\"https:\/\/www.tradingheroes.com\/wp-content\/uploads\/signal.jpg 900w, https:\/\/www.tradingheroes.com\/wp-content\/uploads\/signal-768x305.jpg 768w\" sizes=\"auto, (max-width: 900px) 100vw, 900px\" \/><\/a><\/p>\n<p class=\"p1\">Yeah, as you probably noticed, this was not a legitimate <a href=\"https:\/\/www.tradingheroes.com\/engulfing-candles-guide\/\"  data-wpil-monitor-id=\"289\">Outside bar<\/a>.<\/p>\n<p class=\"p1\">However, I did get alerts that Outside bars printed on other GBP pairs, so I decided to take this one too.<\/p>\n<p class=\"p1\">It printed on a really nice resistance level and the probabilities looked good to me.<\/p>\n<p class=\"p1\">This is one of the important benefits of setting up trading alerts and using <a href=\"https:\/\/www.tradingheroes.com\/how-to-get-started-with-incremental-automation-in-forex-trading\/\">Incremental Automation<\/a>.<\/p>\n<p class=\"p1\">They can help you find related trades, especially when you are busy working a job or traveling.<\/p>\n<p class=\"p1\">Here are some examples of alerts that I got recently.<\/p>\n<p class=\"p1\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-12490\" src=\"https:\/\/www.tradingheroes.com\/wp-content\/uploads\/alerts.jpg\" alt=\"Alerts\" width=\"400\" height=\"270\" \/><\/p>\n<h2 class=\"p1\"><span class=\"s1\">Trade Entry\u00a0<\/span><\/h2>\n<p>Now that I had a solid trade idea, it was time to enter the trade.<\/p>\n<p><span class=\"s1\">\u00a0used the <a href=\"https:\/\/www.tradingheroes.com\/80-20-rule-trading\/\">80\/20 entry<\/a> on the trade, taking 80% of the position on the first profit target, and I let 20% run for additional profits.<\/span><\/p>\n<p>Here is the entry, level and stop loss. The <a href=\"https:\/\/www.tradingheroes.com\/place-stop-loss-order\/\">stop loss<\/a> line is red and the entry line is blue.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-12491\" src=\"https:\/\/www.tradingheroes.com\/wp-content\/uploads\/entry-1.jpg\" alt=\"Entry chart\" width=\"500\" height=\"347\" \/><\/p>\n<h2 class=\"p1\"><span class=\"s1\">Trade Exits<\/span><\/h2>\n<p>The first exit was near the former <a href=\"https:\/\/www.tradingheroes.com\/how-to-draw-support-and-resistance\/\">support level<\/a>. I thought it would be a good place to take some profits.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-12492\" src=\"https:\/\/www.tradingheroes.com\/wp-content\/uploads\/profit-target.jpg\" alt=\"Profit target\" width=\"576\" height=\"540\" \/><\/p>\n<div align=\"center\">\n<blockquote class=\"twitter-tweet\" data-lang=\"en\">\n<p dir=\"ltr\" lang=\"en\">Closed Sell <a href=\"https:\/\/twitter.com\/search?q=%24GBPAUD&src=ctag\">$GBPAUD<\/a> 1.75927 for +229.0 pips, total for today +78.0 pips &lt;&lt; <a href=\"https:\/\/t.co\/S5lhaPRTuN\">https:\/\/t.co\/S5lhaPRTuN<\/a> <a href=\"https:\/\/twitter.com\/hashtag\/TFALchallenge?src=hash\">#TFALchallenge<\/a><\/p>\n<p>\u2014 Hugh Kimura (@TradingHeroes) <a href=\"https:\/\/twitter.com\/TradingHeroes\/status\/776878304674492416\">September 16, 2016<\/a><\/p><\/blockquote>\n<p><script async=\"\" src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<\/div>\n<p>The second exit was near the &#8220;valley&#8221; of the previous low, which\u00a0is usually a safer profit target.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-12493\" src=\"https:\/\/www.tradingheroes.com\/wp-content\/uploads\/second.jpg\" alt=\"Second exit\" width=\"792\" height=\"540\" srcset=\"https:\/\/www.tradingheroes.com\/wp-content\/uploads\/second.jpg 792w, https:\/\/www.tradingheroes.com\/wp-content\/uploads\/second-768x524.jpg 768w\" sizes=\"auto, (max-width: 792px) 100vw, 792px\" \/><\/p>\n<div align=\"center\">\n<blockquote class=\"twitter-tweet\" data-lang=\"en\">\n<p dir=\"ltr\" lang=\"en\">Closed Sell <a href=\"https:\/\/twitter.com\/search?q=%24GBPAUD&src=ctag\">$GBPAUD<\/a> 1.75927 for +637.2 pips, total for today +637.2 pips &lt;&lt; <a href=\"https:\/\/t.co\/S5lhaPRTuN\">https:\/\/t.co\/S5lhaPRTuN<\/a> <a href=\"https:\/\/twitter.com\/hashtag\/TFALchallenge?src=hash\">#TFALchallenge<\/a><\/p>\n<p>\u2014 Hugh Kimura (@TradingHeroes) <a href=\"https:\/\/twitter.com\/TradingHeroes\/status\/780774203075076096\">September 27, 2016<\/a><\/p><\/blockquote>\n<p><script async=\"\" src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<\/div>\n<h2 class=\"p1\"><span class=\"s1\">Secondary Analysis and What I Could Have Done Better <\/span><\/h2>\n<p class=\"p1\"><span class=\"s1\">As I <a href=\"https:\/\/www.tradingheroes.com\/easy-trading-journal\/\">mention here<\/a>, it is very useful to analyze your trades after you have had some time to cool down and release any emotional energy associated with it.<\/span><\/p>\n<p class=\"p1\">One thing to look for is emotional exits and mental mistakes. The best place to start is to look at the chart after the trade is closed.<\/p>\n<p class=\"p1\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-12494\" src=\"https:\/\/www.tradingheroes.com\/wp-content\/uploads\/secondary-exit.jpg\" alt=\"Secondary exit\" width=\"687\" height=\"540\" \/><\/p>\n<p class=\"p1\">In this case, price\u00a0could just be retracing for a move back down.<\/p>\n<p class=\"p1\">However, since\u00a0price is near a major low, it is a good place to get out.<\/p>\n<p class=\"p1\">If there was anything that I could have done better, it was possibly sticking with the first position a little longer.<\/p>\n<p class=\"p1\">But overall, I'm satisfied with the exit and it's on to the next trade!<\/p>\n<h2 class=\"p1\"><span class=\"s1\">Conclusion <\/span><\/h2>\n<p class=\"p1\"><span class=\"s1\">That\u2019s about it. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Although this wasn\u2019t my most profitable trade of the month, it was well executed and it played to one of my strengths, which is the ability to let swing trades run.<\/span><\/p>\n<p class=\"p1\">To make sure that you don't miss any Engulfing\/Outside Bars, our <a href=\"https:\/\/store.tradingheroes.com\/product-category\/metatrader-4-indicators\/\" target=\"_blank\" rel=\"noopener\">MT4 alert indicator<\/a> can be a great solution.<\/p>\n<p class=\"p1\">Happy trading!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Here is an Engulfing Candle trade that bagged +637 pips. I break down the trade to show what I did right and what I did wrong. <\/p>\n","protected":false},"author":2022,"featured_media":12494,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[204239],"tags":[201648],"class_list":["post-12483","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-trading-education","tag-live-trading-results","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Engulfing Candle Trade That Made +637 Pips - Trading Heroes<\/title>\n<meta name=\"description\" content=\"Learn how this trade bagged a lot of pips and was executed pretty well. 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