easy · Volume Price Analysis validation
An 'Engulfing Candle' is observed on a 5-minute chart. What MUST accompany this pattern for a VPA practitioner to consider it a valid reversal signal?
- The second (engulfing) candle must have volume that is well above average.
- The first candle must be a doji with no wicks.
- The pattern must occur exactly at a Fibonacci retracement level.
- The engulfing candle must be at least three times the size of the previous five candles.
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