Engulfing candle stick pattern is one type of candle stick pattern. There are two types of candle stick patterns to identify stock price movements. If you want to learn the complete candle stick patterns, then click here.
The two types of engulfing candlestick patterns are
- Bullish Engulfing Pattern
- Bearish Engulfing Pattern
Bullish Engulfing Pattern
A bullish engulfing pattern is a bullish candlestick pattern. After the formation of the bullish candlestick, the stock has a trend reversal.
Bearish Engulfing Pattern
Bearish engulfing patterns are formed to signal a trend reversal. In the bearish engulfing pattern, the candle stick is a bearish candle stick reversal.
The bullish engulfing pattern is formed in a bullish trend. When the trend gets peaked, the bears will take charge and continuously sell the stocks for a movement of time.
in the below picture, we can observe that the green candle is thinner than the red candle
How do you trade an engulfing pattern?
To trade an engulfing pattern, you need to have a proper setup. The time frame could be between 1 hour to 4 hours depending upon the stock price movement.
What is engulfing bullish
The engulfing bullish is a candle stick pattern used to identify the bullish trend of a candle.
How engulfing bullish pattern is formed?
Conclusion
Engulfing pattern is a widely used candle stick pattern in the stock market. By following the engulfing pattern, one can make a significant return in the stock market. The bullish and bearish are the two types of engulfing patterns. Traders generally use engulfing candlestick pattern to track the stock’s momentum while trading.
The main difference between the bullish engulfing pattern and the bearish engulfing pattern is that the bearish engulfing pattern signals a bearish trend and the bullish engulfing pattern signals a bullish trend.
