Bullish Engulfing Pattern

The third kind of Japanese candlestick formations are bullish engulfing patterns.  These patterns offer much less strength than the pin bar, hanging man and inverted hammer, but they can still offer some insight into potential future market movement.   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 bullish engulfing candle’s real body is very large, the stronger the formation.

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

Due to them offering less reliable signals, it would be best to wait for some confirmation before using a bullish engulfing pattern to enter a trade.

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