Bullish Engulfing candlestick pattern is a bearish bottom catching pattern that is very effective when trading Forex and Fixed Time Trade. This pattern is suitable for those who prefer to open trades on bullish reversal.
On the other hand, the opposite of the Bullish Engulfing candlestick pattern is the Bearish Engulfing Pattern. Therefore, you will see similarities in the two patterns. If you are the type of person who thinks that a bullish order will make the profit line up well then congratulations, this is one of the candlestick patterns right for you.
Through the article, you will learn what Bullish Engulfing Candle Patterns are, how to trade effectively, and minimize risks to maximize profits.
Other strong reversal patterns you can check out:
- The Reverse Head – Shoulders candlestick pattern
- Hammer candlestick pattern
- The Morning Star candlestick pattern
- Double Bottom Candlestick Pattern
Guidelines for identifying the Bullish Engulfing Pattern
The Bullish Engulfing candlestick pattern consists of two candles:
- The first candlestick is bearish, but the force is not strong, even weak, on a downtrend. So, it shows that the market price is at the end, fluctuating around the reversal point.
- The second candle is a very tall bullish candlestick called a bull swallow candle. Yes, its body swallowed the previous bearish candle, indicating that there was a strong force to overflow the market price.
The opening price of this candle even fell lower than the previous candle, then bounced sharply above the previous high.
- Usually, appear at the end of a downtrend.
- Candle 1 sits neatly in the body of candle 2.
- Candle 1 may be small but candle 2 should be as tall as the previous 5-8 candles.
Meaning of the Bullish Engulfing Pattern
The Bullish Engulfing candlestick pattern proves to be the end of a fairly clear downtrend. The last candle has a very weak downward momentum, followed by an extremely strong bullish candle.
This shows that the selling investors were making sell orders to take profits because of realizing the strong fall in prices. At some point, the buy investors have the right timing to enter the bull market, so the trend is reversing. This is the golden time to make the Fixed Time Trade order.
And after that, the price tends to increase again, that bottom is an important point to pay attention to. Often the accuracy, when combined with other indicators and signals, is very high.
How to open a Bullish Engulfing trade
This pattern is only used to capture a bullish reversal. Therefore it can only be done for incremental transactions.
If you are the one who always opens short positions, you should open your trades for 5 minutes with a session time of 1 minute.
If you are a fan of long trades, open a 10-minute session, and set 60 minutes.
The correct probability will always be high, but remember that a pattern works only when you are in a sharp downtrend and there is no fluctuation.