Engulfing Pattern in Trading – Explained Simply


The Engulfing pattern is a powerful candlestick pattern used in technical analysis to predict potential reversals in the market. It can be bullish or bearish, depending on its position and structure.


1. Bullish Engulfing Pattern:- Occurs in a downtrend.- A small red (bearish) candle is followed by a larger green (bullish) candle.- The green candle completely engulfs the body of the previous red candle.- Signal: Buyers are gaining strength, and a reversal to an uptrend may occur.


2. Bearish Engulfing Pattern:- Occurs in an uptrend.- A small green (bullish) candle is followed by a larger red (bearish) candle.- The red candle completely engulfs the body of the previous green candle.- Signal: Sellers are taking control, and a reversal to a downtrend may happen.


Key Notes:- Works best on higher timeframes like H4, Daily, or Weekly.- Volume confirmation adds more reliability.- Should be used with support/resistance zones or other indicators.


In short,  an engulfing pattern shows a sudden shift in momentum and is a strong hint that the current trend might be ending.