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đ„ Bearish & Bullish Engulfing Pattern đ„
The engulfing candlestick pattern đ is one of the most common patterns used by traders to identify trend reversals đ and continuations after a pullback in the financial markets đđ.
In a bullish engulfing pattern đ, the first candlestick is red đŽ, and the second one is green đą. The body of the green candlestick is much larger than the body of the red candlestick, with very little to no overlapping shadows. Also, the green candlestick has to open lower than the previous candlestickâs close đœ and close higher than the previous candlestickâs high đŒ. The bullish engulfing pattern indicates that buyers đââïž have taken control, and the price will likely go up đ.
A bearish engulfing pattern đ is valid when a green candlestick đą is followed by a larger red candlestick đŽ. The exact opposite of a bullish engulfing pattern. The green candlestick must completely cover (or engulf) the previous candlestick đ. The pattern suggests that the bears đ» have taken charge of the market, and indicate a possible decline in price in the near future âŹïž, so traders look for shorting opportunities đ«.