Bearish Engulfing

Visual Pattern

The Bearish Engulfing Candlestick Pattern contains two candles: A white or green body candlestick, that is smaller than the second candle in this pattern. A black or red body candlestick, that is bigger than the first candle in this pattern.

Interpretation

The name of this pattern already indicates the likely direction of price afterwards, it indicates a revarsal down. Looks for this pattern in an upward trend.

Reducing Risk

You can reduce risk by waiting for confirmation that the pattern is working. You can wait until the day after the pattern has occured and the downward trend is developing. Or you can wait until you get another signal from another pattern or indication that the trend is going downward.

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