Open Price and Engulfing Bars - MT4/MT5 Resources

Open Pivot Price Action System

Introduction:

1. It's a very simple system because I like to keep it simple.
2. Use appropriate risk:reward/money management when trading and don't over-leverage.
3. Before making any trading decisions, I always look at the bigger picture from the 4 hourly/daily/weekly/monthly charts.
4. I trade 28 pairs on the 4 hour to daily chart. It's just my preference and fits my schedule. (But this system also works on lower timeframes. Just adjust your Take Profit/Stop Loss accordingly)
5. Trading market hours (24 hours). I wouldn't limit myself to certain market hours.
6. I don't use EA or any indicators. You are more than welcome to put it into EA and test it yourself.

Notice:
- Please don't ask me questions about trading results, win/loss ratios, etc... because not everyone will trade on the exact same system and get the same results. Do your due diligence and test it out for yourself.

system:

- opening price
- Swallow gold bars

The general idea is to look for engulfing bars above or below the opening price pivot. Look for buys above the open and sell below.

Opening price (pivot)
- I use it similar to pivot points.

1. The opening price is dynamic and changes based on the results of the current candle's high/low/and closing price.
2. If the current candle (let's call it Bar2) has a higher high or a lower low than the previous candle (let's call it Bar1), then once Bar2 closes, the pivot will move to Bar2's "open price."

Example of candle moving upward

So, for this example, let's say our opening starts at bar 1.
Bar2 makes a higher high, and once Bar2 closes, the open pivot moves to Bar2's open.
Bar3 makes a higher high, and once Bar3 closes, the open pivot moves to Bar3's open.
Bar 4 did not form a higher high and the opening price pivot remained at Bar 3.
Bar5 has a higher high than Bar3, and once Bar5 closes, the opening price pivot will move to Bar5.

This is the same process of moving the open price pivot when the price falls, as each candle's low is lower than the previous candle.

- When looking for buy setups (opposite when looking for sell setups):

1. Price is above the pivot and has an engulfing candle

or

1. The candle opens below the pivot and closes above the pivot, forming an engulfing pattern.

Annex g

As an example of a sell setup, bar 1 opens above the open pivot and closes below the pivot, engulfing the previous candle. And it doesn't matter how many candles it swallowed up before it.

When Bar2 opens, the sell stop loss is the size of Bar1 and the take profit is the size of Bar1.

Like any system, I always look at the larger time frame to understand the general direction of the market before making any decisions. ie. If the trend is up, I would avoid looking to sell and vice versa.

EDIT: Added more examples below.

I trade using both options.
1) Enter buy/sell conditions on a timeframe chart and adjust the open price pivot (i.e. 4 hour, daily, shorter timeframes will work too, but I prefer longer timeframes)

2) Buy/sell on shorter timeframes but use the opening price pivot on longer timeframes.
- 4 hour entry/daily open price pivot
or
- 15 minute entry / 1 hour opening price pivot