ProSignalsFx

♻️UNDERSTANDING THE BULLISH ENGULFING CANDLE PATTERN♻️

OANDA:EURUSD   Euro / U.S. Dollar
☑️WHAT IS A BULLISH ENGULFING CANDLE?
The bullish engulfing candle appears at the bottom of a downtrend and indicates a surge in buying pressure. The bullish engulfing pattern often triggers a reversal in trend as more buyers enter the market to drive prices up further. The pattern involves two candles with the second candle completely engulfing the body of the previous red candle.

☑️HOW TO SPOT A BULLISH ENGULFING PATTERN AND WHAT DOES IT MEAN?

▪️Characteristics of a bullish engulfing pattern:
• Strong green candle that ‘engulfs’ the prior red candle body (disregard the wicks)
• Occurs at the bottom of a downward trend
• Stronger signals are provided when the red candle is a doji , or when subsequent candles close above the high of the bullish candle.

▪️What does it tell traders?
• Trend reversal to the upside ( bullish reversal)
• Selling pressure losing momentum at this key level.

▪️Advantages of trading with the bullish engulfing candle:
• Easy to identify
• Attractive entry levels can be obtained after receiving confirmation of the bullish reversal.

☑️KNOW THE DIFFERENCE BETWEEN A BULLISH AND A BEARISH ENGULFING PATTERN
Engulfing patterns can be bullish and bearish . The bearish engulfing pattern is essentially the opposite of the bullish engulfing pattern discussed above. Instead of appearing in a downtrend, it appears at the top of an uptrend and presents traders with a signal to go short. It is characterized by a green candle being engulfed by a larger red candle.

☑️CONCLUSION
A Bullish Engulfing Candle becomes an excellent tool for the trader, once he masters how to use it properly!

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