A bullish candle followed by a larger bearish candle whose body swallows the prior body. Sellers have taken control after a push higher.
How to identify it
- Occurs after a rally or at resistance
- Second body fully covers the first body
- Second candle closes near its low
Entry
Sell at the engulfing close or on a small retrace into its body.
Stop loss
Above the high of the two-candle pattern.
Target
Prior swing low or the bottom of the range.
Invalidation
A close above the engulfing candle open.
Does it work for you?
Textbook reliability means little until you know your own numbers. Tag your bearish engulfing trades in TradeZento and it shows your win rate, average win and loss, and P&L per trade for this pattern, so you know whether to keep it in your playbook.