CANDLE PATTERN 2 - BEARISH ENGULFING
Pattern name: Bearish Engulfing
Pattern Type : Bearish Reversal
No. of Candles : 02
How to Identify it ?
1)There must be a preceding Uptrend.
2)A short Green candle followed by a long Red candle.
3)The Red candle should opens higher & closes lower than the Green candle.
4)The Green candle should be completely engulfed by the Red candle.
Psychology behind it :
1)The Bulls lose momentum & the Bears take charge and managed to close below the Green candle.
2)It implies the bears have fully override the bulls.
How to trade it ?
1)Look for the Bearish Engulfing at the Top of the Uptrend.
2)Upon confirmation, open a Short position in the 3rd Candle.
3)Place a Stoploss above the high of the Red candle.
Pattern Type : Bearish Reversal
No. of Candles : 02
How to Identify it ?
1)There must be a preceding Uptrend.
2)A short Green candle followed by a long Red candle.
3)The Red candle should opens higher & closes lower than the Green candle.
4)The Green candle should be completely engulfed by the Red candle.
Psychology behind it :
1)The Bulls lose momentum & the Bears take charge and managed to close below the Green candle.
2)It implies the bears have fully override the bulls.
How to trade it ?
1)Look for the Bearish Engulfing at the Top of the Uptrend.
2)Upon confirmation, open a Short position in the 3rd Candle.
3)Place a Stoploss above the high of the Red candle.
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