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๐ฅ Bearish & Bullish Engulfing Pattern ๐ฅ
The engulfing candlestick pattern ๐ is one of the most common patterns used by traders to identify trend reversals ๐ and continuations after a pullback in the financial markets ๐๐.
In a bullish engulfing pattern ๐, the first candlestick is red ๐ด, and the second one is green ๐ข. The body of the green candlestick is much larger than the body of the red candlestick, with very little to no overlapping shadows. Also, the green candlestick has to open lower than the previous candlestickโs close ๐ฝ and close higher than the previous candlestickโs high ๐ผ. The bullish engulfing pattern indicates that buyers ๐โโ๏ธ have taken control, and the price will likely go up ๐.
A bearish engulfing pattern ๐ is valid when a green candlestick ๐ข is followed by a larger red candlestick ๐ด. The exact opposite of a bullish engulfing pattern. The green candlestick must completely cover (or engulf) the previous candlestick ๐. The pattern suggests that the bears ๐ป have taken charge of the market, and indicate a possible decline in price in the near future โฌ๏ธ, so traders look for shorting opportunities ๐ซ.
