How to Trade The Bullish Engulfing Pattern

Digiasset News Oct 04, 2022

The engulfing candle is indicates buying pressure. The bullish engulfing pattern often triggers a trend reversal as more buyers enter the market to push the price up further. The pattern involves two candles with the second candle fully preceding the body of the previous candle. This pattern is a signal to open long positions. In some cases for accurate results this pattern can apply for reversal movement.

Characteristics of bullish engulfing pattern is the second candle (green candle) completely ‘engulfs’ the real body of the first one (red candle), without regard to the length of the tail shadows. Example of bullish engulfing pattern that appears on the MATIC/IDR H1 chart below.

First, the pattern is shown after downtrend. Then, next candlestick validates an opportunity /signal when it closes above the high level of the bullish candle (look at blue circle mark). Some Traders put their cut loss below the low level of the bullish engulfing candlestick pattern with the target set at last resistance before the price drop. Trader's key to building confidence when trading a bullish engulfing pattern is to complement with supporting signals ( support and resistance, Double Bottom, etc). Keep Do Your Own Research before investing

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