The Basic of Engulfing candlestick pattern
1.Bearish engulfing
2.Bullish engulfing
What is Bullish engulfing pattern?
The bullish engulfing candlestick pattern is a two-candlestick pattern that indicates a potential reversal from bearish to bullish price action. The first candlestick is typically a bearish candlestick that is followed by a second, bullish candlestick that completely "engulfs" the body of the first candlestick.
How to trade whith Bullish engulfing pattern?
This pattern can be found at the end of a downtrend or during a period of consolidation and it suggests that buyers are starting to gain control of the market.
While this is not a guaranteed reversal pattern, it is a strong indication that bullish sentiment is growing and that prices could start to move higher. Traders may look to enter long positions or to initiate bullish reversal strategies when this pattern appears.
What is bearish engulfing pattern?
A bearish engulfing candlestick pattern is a two-candlestick pattern that indicates a potential reversal of an uptrend. The first candlestick is typically a small white candlestick that is followed by a large black candlestick. The black candlestick should completely engulf the white candlestick, meaning that it should have a higher high and a lower low.
The Bearish Engulfing pattern is a two candlestick reversal pattern that signals a bearish down move may occur.
This type of candlestick pattern occurs when the bullish candle is immediately followed by a bearish candle that completely “ engulfs” it.
How to trade with bearish engulfing pattern?
The bearish engulfing pattern is a strong reversal signal and should be treated with caution. This is especially true if the pattern occurs after a long uptrend. In order to confirm the pattern, traders typically wait for the next candlestick to open below the low of the black candlestick.
If you see a bearish engulfing pattern, it's important to pay attention to the overall market conditions. If the market is in a strong uptrend, the pattern may be a false signal. However, if the market is in a weak uptrend or is range-bound.
