What are engulfing patterns?

There are two engulfing patterns to look out for: bullish engulfing and bearish engulfing patterns. What is an Engulfing Candlestick? Engulfing candles tend to signal a reversal of the current trend in the market. This specific pattern involves two candles with the latter candle ‘engulfing’ the entire body of the candle before it.

What is engulfing candlestick pattern?

Engulfing is a trend reversal candlestick pattern consisting of two candles. Depending on their heights and collocation, a bullish or a bearish trend reversal can be predicted. The second candle is bearish and its Open price is higher than the first candle's Close price;

What is a bearish engulfing candle?

The bearish engulfing pattern is simply the opposite of the bullish pattern. It provides the strongest signal when appearing at the top of an uptrend and indicates a surge in selling pressure. The bearish engulfing candle often triggers a reversal of an existing trend as more sellers enter the market and drive prices down further.

What is a bullish engulfing pattern?

A bullish engulfing pattern may be contrasted with a bearish engulfing pattern . A bullish engulfing pattern is a candlestick pattern that forms when a small black candlestick is followed the next day by a large white candlestick, the body of which completely overlaps or engulfs the body of the previous day’s candlestick.