Bullish Engulfing
A strong bullish reversal pattern where a large green body fully engulfs the prior red body, ideally after a downtrend.
BullishReversalHigh reliability
engulfingreversalsupportbody
Definition
- Two-candle pattern.
- Candle 1 is bearish (red). Candle 2 is bullish (green).
- The real body of Candle 2 fully engulfs the real body of Candle 1 (open/close to open/close).
Market Psychology
- Sellers are in control first, pushing price down.
- Buyers then overwhelm sellers and close strongly above the prior candle’s body.
- Often marks a shift from distribution to accumulation when it occurs at a key level.
Rules
- Prefer a prior downtrend or selloff into support.
- The second candle body should be meaningfully larger than the first.
- Stronger if the second candle closes near its high (shows conviction).
Best Context
- At support after a downtrend.
- After a liquidity sweep / wick below support then recovery.
- Near a key moving average in an uptrend pullback (trend continuation variant).
Confirmation Ideas
- Next candle makes a higher high / closes higher.
- Pattern forms at support (prior lows, demand zone, moving average, trendline).
- Volume expansion on the engulfing candle (if you use volume).
Invalidations
- Price immediately re-enters and closes below the engulfing candle midpoint.
- Breaks below the engulfing candle low (common invalidation level).
Common Mistakes
- Trading it mid-range with no level/context.
- Ignoring trend (engulfing against a strong trend without confirmation).
- Entering late after multiple continuation candles.