Here is an example of strategy when you see the appearance of the Engulfing pattern filtered by Stochastics at the overbought area, during the course of an uptrend.

Consider selling when the next candle falls below the low price of the pattern.

Consider placing a protective stop loss at the top of the pattern.

Take-Profit strategy is heavily dependent on the trading profile of each individual:

1. Close 60% of the position when price travels 100% the length of the pattern.
   • Close the remaining 30% when price reaches the 200% of the length of the pattern.
   • Move the protective stop-loss at the bottom of the pattern.
   • Close the remaining 10% of the position at the presence of a reversal candlestick or when price closes below the LWMA(50) or when price travels 300% of the length of the pattern, whichever happens first.
2. Other combinations may be applied.