About Lesson
- A bullish engulfing pattern is a bullish candlestick that closes higher than the previous day’s opening after opening lower than the previous day’s close.
- A bullish engulfing pattern is a candlestick pattern that forms when a small black candlestick is followed the next day by a large white candlestick, the body of which completely overlaps or engulfs the body of the previous day’s candlestick.
- Bullish engulfing patterns are more likely to signal reversals when they are preceded by four or more black candlesticks.
- A bullish engulfing pattern can occur anywhere, but it is more significant if it occurs after a price advance. This could be an uptrend or a pullback to the upside with a larger downtrend.
- The real body—the difference between the open and close price—of the candlesticks is what matters. The real body of the up candle must engulf the up candle.
- The pattern has far less significance in choppy markets.
