Candlestick patterns
Bearish engulfing pattern
A red candle whose body completely covers the previous green candle’s body, after a rise.
Why it works
Sellers overwhelmed buyers in a single period. At resistance or in premium it is a strong rejection signal.
How to use it
Look for it at resistance or above equal highs. Stop above the pattern’s high, target the next swing low or liquidity below.
The typical mistake
Selling every bearish engulfing on the 1-minute chart while the higher timeframe keeps going up.
FAQ
What is Bearish engulfing in trading?
A red candle whose body completely covers the previous green candle’s body, after a rise.
How do you trade Bearish engulfing?
Look for it at resistance or above equal highs. Stop above the pattern’s high, target the next swing low or liquidity below.