Bearish Engulfing Pattern Flashcards
1
Q
What is a Bearish Engulfing Pattern?
A
The pattern consists of an up (green) candlestick followed by a large down (red) candlestick that eclipses or “engulfs” the smaller up candle.
2
Q
What does the Bearish Engulfing Pattern signal?
A
A bearish engulfing pattern is a technical chart pattern that signals lower prices to come.
The pattern can be important because it shows sellers have overtaken the buyers and are pushing the price more aggressively down (down candle) than the buyers were able to push it up (up candle).
3
Q
How to react when identifying the Bearish Engulfing Pattern?
A
Before acting on the pattern, traders typically wait for the second candle to close and then take action on the following candle.
