The bullish and the bearish engulfing patterns: beating the forex market or being beaten?

The paper investigates the bullish and the bearish engulfing patterns in the forex spot market. We scanned over 112,792 in-sample daily candles and 148,992 out-of-sample four-hour candles and used more than three million spot quote observations among 24 currency pairs from 2000 to 2018. The findings are of great interest. First, we document the significance of profitability of technical analysis in the forex market, particularly for the seven majors. This presumably lends support to the inefficiency of the forex market. Second, we document the significance importance of transactions costs. Third, we document the superiority of the American dollar over the other major currencies. [ABSTRACT FROM AUTHOR]