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Trading and Investment Terminology

bearish engulfing pattern

Bearish Engulfing is one of the important bearish reversal patterns. It appears after an uptrend. 

 

It's a two candlestick pattern.

 

It is characterized by a red candle being engulfed by a larger green candle.

Detail definition

  • A bearish engulfing pattern is a bearish reversal pattern.
  • Sellers are momentarily in control.
  • The larger it is, the more significant the pattern is.
  • Don't treat this pattern in isolation. Just because you see a bearish engulfing pattern doesn't mean you go short.
  • The real body- the difference between the open and close price of the candlesticks is what matters. The real body of the down candle must engulf the up candle.
  • The pattern has far less significance in choppy markets.

 

 

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