Bullish engulfing candlestick
bullish · candle pattern
A bullish engulfing pattern is a two-candle bullish reversal: a small bearish (down) candle followed by a larger bullish (up) candle whose body completely engulfs the prior body. It signals an aggressive shift from sellers to buyers, especially after a downtrend.
Formation rules
- First candle is bearish, second is bullish
- Second candle's real body fully engulfs the first
- Forms after a downtrend
- Volume on the engulfing candle expands
How to trade it
Buy on the engulfing candle close, or wait for next-candle continuation. Stop below the engulfing candle low. Highest reliability when combined with oversold momentum.
Common pitfalls
- In strong downtrends, engulfing patterns frequently fail without follow-through
- Volume confirmation matters
Statistical context
One of the most reliable two-candle reversals in candle research; statistical edge documented across multiple markets.
Related patterns
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