01. Bullish Engulfing :
In this pattern, on the first day, a small red candle is formed, which is made according to the downward momentum.
It was followed by a long green candle covering her. The long green candle means that the bulls are outperforming the bears and the trend is reversing.
The strong opening of the third day gives you the confirmation to buy. If the long candle succeeds in covering the shadow of the previous day's bearish candle, it is considered a stronger sign.
A small red candle is formed as you can see in the chart above.
The next day a long green candle was formed which covered the red candle of the previous day.
This is an indication that the bulls have become active and now the trend is about to reverse.
On the third day, a strong price opens which indicates a buy.
If the volume increases on the day of engulfing, it is considered a stronger signal that a bullish trend will now be established.
02. Bearish Engulfing :
This is a trend reversal pattern. This indicates that the upward trend will end and the downward momentum will begin.
This pattern shows the formation of a small green candle on the first day. The next day the recessionary red long candle is formed which covers the candle of the previous day.
The long red candle means that the strong trend is reversing.
When you look at the design of this candle, it is ready to go down and if it is bought, it should be sold out. The price opening down on the third day signals a bearish move.
It was accompanied by three times the volume. Which makes the signals even stronger.
On the third day, prices fall further and confirm the decline.
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