Bearish Engulfing Pattern

Like bullish engulfing patterns, bearish engulfing patterns fall into what is possibly the third most powerful kind of Japanese candlestick patterns.  Again, these patterns offer less confirmation of a potential change in trend and should be used with caution.  They typically have the following characteristics:

• Their real body must engulf the previous candles real body.
• The real body should be the opposite colour of the previous candle.
• If the previous candle’s real body is very small and the bearish engulfing candle’s real body is very large, the stronger the formation.

Bearish engulfing patterns show that the sellers overcame buyers and this can be seen by the candlestick completely
engulfing the previous candlestick body.

It is recommended that you wait for confirmation before entering a trade based solely on a bearish engulfing pattern.

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