Try Pocket Option Quick Sign up and get extra rewards
Signing up is free and takes 5 secs only…
The Bullish Engulfing Pattern is a powerful candlestick pattern that traders and investors often use to identify the potential reversal in the market, especially during the downtrend.
What is a Bullish Engulfing pattern?
The bullish engulfing pattern is a trend reversal pattern usually found during a downtrend. Here, the first candle is bearish and the second candlestick pattern is bullish that completely engulfs the first one. The first candle is typically red indicating a decline in the price while the second candle is green with a big body and zero shadow indicating a price increase. The appearance of this pattern indicates the drying of selling pressure and the increase in buying pressure is starting to dominate, which means we can see the start of an uptrend.
How to find Bullish Engulfing Pattern
To identify a bullish engulfing pattern traders should follow the following steps:
1> Market Position: This candlestick pattern should appear after a significant downtrend signalling a potential change in market trend.
2> First candle: The first and foremost candle should be a small bearish candle that represents the continuation of a downtrend.
3> Second candle: The second candle should be a big bullish candle that completely engulfs the first candle’s body indicating the start of a new bullish trend.
How to trade Bullish Engulfing Pattern
Bullish Engulfing Pattern is very spot and trade with. As you can see above firstly, we can see a big downtrend second, a big green candle that completely engulfs the same. You can use this opportunity to place a buy trade.
Application on Pocket Option
Pocket Option offers traders the ability to spot and use high-quality candlestick patterns such as the Bullish Engulfing Pattern. Now, To apply the candlestick pattern follow the steps given below
1> Chart setup: Traders need to set the candlestick chart in order to ensure that they spot the Bullish Engulfing Pattern properly. So, first, log in to your Pocket Option account second click on the chart button and select candlestick from the menu.
2> Confirmation: While trading on Binary Options, It is always advisable to seek additional confirmation before you can place a trade using the candlestick pattern. You could use high-quality indicators such as RSI, Stochastic & more.
3> Time: Practice makes traders perfect while placing trades using the pattern make sure to practice properly and understand for how long the trend could last.
