Bullish Engulfing

Visual Pattern

The Bullish Engulfing Candlestick Pattern contains two candles: A black or red body candlestick, that is smaller than the second candle in this pattern. A white or green 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 up. Looks for this pattern in a downward 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 upward trend is developing. Or you can wait until you get another signal from another pattern or indication that the trend is going upward.

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