Pattern Name: Bullish Engulfing
Pattern Type: Bullish Reversal
No. of Candles: 02
How to Identify it?
1)There must be a preceding Downtrend.
2)A short Red candle followed by a long green candle.
3)The Green candle should open lower & closes higher than the Red candle.
4) The Green candle should completely engulf the Red candle.
The psychology behind it :
1)The Bears lose momentum & the Bulls take charge and manage to close above the red candle.
2)It implies the bulls have fully overridden the bears.
How to trade it?
1)Look for the Bullish Engulfing at the bottom of the Downtrend.
2)Upon confirmation, open a Long position in the 3rd Candle.
3)Place a Stoploss below the low of the Green candle.
Pattern Type: Bullish Reversal
No. of Candles: 02
How to Identify it?
1)There must be a preceding Downtrend.
2)A short Red candle followed by a long green candle.
3)The Green candle should open lower & closes higher than the Red candle.
4) The Green candle should completely engulf the Red candle.
The psychology behind it :
1)The Bears lose momentum & the Bulls take charge and manage to close above the red candle.
2)It implies the bulls have fully overridden the bears.
How to trade it?
1)Look for the Bullish Engulfing at the bottom of the Downtrend.
2)Upon confirmation, open a Long position in the 3rd Candle.
3)Place a Stoploss below the low of the Green candle.