Bullish Engulfing Pattern Strategy For Identifying Price Direction - The bullish engulfing pattern is a candle pattern that is identified because the rising candle closes higher than the previous day's open after the opening is lower than the previous day's close when the trend is down. This pattern is widely used by world traders to identify that the direction of the price trend will change in an upward direction, The bullish engulfing pattern is considered by some traders as a candle pattern that provides a strong signal to enter market entry.
- To enter the market, an investor must see not only the two candlesticks that form a bullish engulfing pattern, but also the previous candlesticks.
- A bullish engulfing pattern is more likely to signal a reversal when it was preceded by four or more descending candles.
- The bullish engulfing pattern is a candle pattern that is formed when a small down candle is followed by a large upward candle, in this pattern the rising candle engulfs the entire body of the previous candle.
A bullish engulfing pattern cannot be an initial signal of an upward or bullish reversal, but it doesn't always happen like that, even though it provides more correct signals. As an investor you need to look from a bigger perspective in taking action to enter the market. Combining this bullish engulfing pattern with other trading methods such as the bollinger bands indicator will provide a more accurate reversal signal.
Take profit using bullish engulfing pattern
By knowing where the next price will go using a bullish engulfing pattern, as an investor or trader, you can immediately take action to take profits that have been obtained by leaving the market.