A bearish candle followed by a larger bullish candle whose body completely covers the prior body. Buyers have overwhelmed the previous bar of selling.
How to identify it
- Occurs after a decline or at support
- Second body fully covers the first body
- Second candle closes near its high
Entry
Buy at the engulfing close or on a shallow pullback into its body.
Stop loss
Below the low of the two-candle pattern.
Target
Prior swing high or the top of the range.
Invalidation
A close below the engulfing candle open.
Does it work for you?
Textbook reliability means little until you know your own numbers. Tag your bullish 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.