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Bearish and Bullish Engulfing Patterns

Spotting price reversals is one of the most difficult skills to master when trading the Forex market. Through chart analysis, traders can learn to identify candlestick patterns which is very useful for this task. Candlestick patterns can give a visual insight into market psychology and can suggest changes in sentiment which is very useful in finding price reversals.

The Bullish and Bearish Engulfing patters are a powerful reversal signal because they are usually a part of other trading systems and patterns. Both of them are important patterns followed in Managed Forex Accounts, Forex Trading Signals, and it is among subjects discussed in the Training Course,

A Bullish Engulfing pattern is a chart pattern that forms after a long white candlestick covers the previous period’s black candlestick. This pattern represents a reversal signal of a bearish trend and the beginning of a new direction, which happens when bulls have taken control over the price movement of a financial instrument.

Bullish Engulfing | FXLORDS

As with other Japanese candlestick trading patterns, traders must look for confirmation before executing trades. It should be noted here that the Bullish Engulfing pattern means the possibility of a reversal only when it appears within a downtrend, if it appeared within an uptrend then it means that the price will continue to rise.

The Bearish Engulfing pattern is the opposite of the Bullish Engulfing pattern, it is a chart pattern that forms after a long black candlestick covers the previous period’s white candlestick. This pattern represents a reversal signal of a bullish trend and and the beginning of a new direction, which happens when bears have taken control over the price movement of a financial instrument.

Bearish Engulfing | FXLORDS

As with other Japanese candlestick trading patterns, traders must look for confirmation before executing trades. It should be noted here that the Bearish Engulfing pattern means the possibility of a reversal only when it appears within a uptrend, if it appeared within a downtrend then it means that the price will probably continue to fall.

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About Razi Hammoudeh

Razi’s professional experience was gained over the course of more than a decade working with leading Forex market makers in the Middle East, Asia and Europe where he learned about trading, financial instruments and global markets. Being exposed to the wide range of skills he acquired along the years, he continued to develop his trading strategies and further improving his track record in Forex trading. He used innovative business development strategies to find FXLORDS, helping it to rapidly become a major provider of education and trading tools to the successful trader. He is an enthusiastic individual, motivated by challenge and renowned for pushing the limits, always looking to gain some more experience and help as much as possible along the way.

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