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engulfing pattern is simple and reliable pattern, its reversal pattern good for weekly trades.
bullish engulfing – latest green body should cover the previous days red body completely, trading volume might increase, the bullish engulfing should appear after a price fall. buy when you see the price crossing the engulfing days high, profit will be risk taken.
bearish engulfing – red body should cover the previous days green body completely, trading volume might increase, the bearish engulfing should appear after a rise in prices, sell when the prices crosses the previous days low.
A bullish engulfing pattern occurs in the candlestick chart of a security when a large white candlestick fully engulfs the smaller black candlestick from the period before. This pattern usually occurs during a downtrend and is thought to signal the beginning of a bullish trend in security.
Condition for bullish engulfing: Fall in price trend for few days observed & Latest green body is covering the previous red body with significant volume.A bearish engulfing pattern is a technical chart pattern that signals lower prices to come. The pattern consists of an up (white or green) candlestick followed by a large down (black or red) candlestick that engulfs the smaller up candle.
When to Sell: Create a short position when the price goes below the latest red body’s lowest price(A). Buying should happen at the target or at stop loss (price goes above B).
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