The Bearish Engulfing candlestick pattern is one of the most common patterns at the end of an uptrend. In other words, this is a bearish reversal or peak pattern with the shape of a bear claw. Suitable for Traders who like to open bearish FTT trades or find a reasonable selling time.
Before to go, I think you should read this short article about the candlestick shapes: https://traderrr.com/name-of-shapes-of-japanese-candlestick-define-and-use/
What is the Bearish Engulfing candlestick pattern?
The Bearish Engulfing candlestick pattern usually appears at the end of an uptrend, it consists of only two opposite candles.
- Candle 1 is a bullish candle with a short body at the bottom with a long upper tail. That shows the market is having a strong pulling-about to the downside.
- Candle 2 is a complete bearish candle with a body 2 times longer than the body of candle 1.
- Remember that the chart should be a steady uptrend.
Meaning of Bearish Engulfing
Bearish Engulfing is a regular candlestick pattern found at the end of an uptrend. However, you can not define it without their characteristic that a weak bullish candle has a long upper beard, followed by an extremely strong bearish candle which is a sign of an imbalance of tension. It is a sign that the market starts to strongly reverse into a complete downtrend.
Remember, this is a pattern that makes sense if and only if the market is on the uptrend. The more steadily the price increases over a long period of time, the more likely the reversal point of this pattern appears. The probability is relatively large.
How to open a Bearish Engulfing trade
The Bearish Engulfing candlestick pattern is easy to enter. If you are on the verge of an uptrend and see a Bearish Engulfing candlestick pattern, now is the time to take profit or open a bearish position.
The best time to focus your attention is when the candle 1 appears. It’s best if you try to make a short position.