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Bullish Engulfing Pattern - Multiple Candlestick Pattern


Welcome to bullish engulfing patterns - I

                                          Bullish Engulfing (Bullish)                                                        

                                                      


How to recognize it?


  •      There must be a preceding downtrend
  •      A short of red candle followed by a longer green candle
  •      The green candles open lower and closes higher than the red candle completely engulfing it


 What is the psychology behind?


  •  The red candle implies the control of the bears followed by a prolonged downtrend
  • In next session, the market opens below the low of the red candle suggesting continuation of the bearish forces
  • The bears then lose momentum, the bulls take charge and lead the price of doing the session and eventually managed to close above the high of the red candle
  • The bulls have now full overridden the bears


 How do we trade it?

  • Look for the bullish engulfing at the bottom of a downtrend
  • Wait for the next candle to close above the high of the green candle to confirm the existence of bullish force
  • Open a long position on confirmation
  • Place a stop loss below the lower green candle
Bullish Engulfing




Glossary of Trading - https://thestocksexpress.blogspot.in/2018/02/understanding-glossary-of-trading.html

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