Candlestick patterns
Bullish engulfing pattern
A green candle whose body completely covers the previous red candle’s body, after a decline.
Why it works
It shows a sudden change of control: in one period buyers erased everything sellers did in the previous one.
How to use it
Trade it at support, a discount zone or after a liquidity sweep. Stop below the engulfing candle’s low; target the next swing high.
The typical mistake
Buying an engulfing candle in the middle of a downtrend with nothing below to support it.
FAQ
What is Bullish engulfing in trading?
A green candle whose body completely covers the previous red candle’s body, after a decline.
How do you trade Bullish engulfing?
Trade it at support, a discount zone or after a liquidity sweep. Stop below the engulfing candle’s low; target the next swing high.