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THE CANDLESTICK TRADING BIBLE
The engulfing bar candlestick pattern
The Engulfing bar as it states in its title is formed when it fully engulfs
the previous candle. The engulfing bar can engulf more than one
previous candle, but to be considered an engulfing bar, at least one
candle must be fully consumed.
The bearish engulfing
is one of the most important candlestick
patterns.
This candlestick pattern consists of two bodies:
The first body
is smaller than the second one, in other words, the
second body engulfs the previous one. See the illustration below:
This is how a bearish engulfing bar pattern looks like on your charts,
this candlestick pattern gives us valuable information about bulls and
bears in the market.
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THE CANDLESTICK TRADING BIBLE
In case of a bearish engulfing bar, this pattern tells us that sellers are
in control of the market.
When this pattern occurs at the end of an uptrend, this indicates that
buyers are engulfed by sellers which signals a trend reversal.
See the example below:
As you can see when this price action pattern occurs in an uptrend, we
can anticipate a trend reversal because buyers are not still in control
of
the market, and sellers are trying to push the market to go down.
You can’t trade any bearish candlestick pattern you find on your chart;
you will need other technical tools to confirm your entries.
