Engulfing Candle & Market Reversal | Advanced Lesson

Hey traders,

In this article we will discuss how we can spot a market reversal relying on a classic candlestick pattern formation.

The Bullish Engulfing pattern is a two candlestick reversal pattern that signals a strong up move may occur.

It happens when a bearish candle is immediately followed by a larger bullish candle.
This second candle “engulfs” the bearish candle. This means buyers are flexing their muscles and that there could be a strong up move after a recent downtrend or a period of consolidation.

On the other hand, the Bearish Engulfing pattern is the opposite of the bullish pattern.

This type of candlestick pattern occurs when the bullish candle is immediately followed by a bearish candle that completely “engulfs” it.
This means that sellers overpowered the buyers and that a strong move down could happen.

If the engulfing candle engulfs 2 preceding candles, it indicates even stronger momentum.

Learn to spot that pattern because it is extremely efficient.

What do you want to learn in the next post?