Skip to content
CoinChartist

CoinChartist

Your Future Charts Here

Buy the CoinChartist Crypto Trading Journal, now available at Amazon.
Primary Menu
  • Featured
  • Japanese Candlesticks
  • Chart Patterns
  • Technical Indicators & Oscillators
  • Home
  • Education
  • Japanese Candlesticks
  • Bullish Engulfing
  • Bullish Candlestick Patterns
  • Japanese Candlesticks

Bullish Engulfing

The Bullish Engulfing pattern is a bullish reversal pattern that typically forms after a downtrend or during market consolidation.
428
Bullish engulfing Japanese candlestick pattern crypto
  • Sentiment: Bullish
  • No. of candles: 2
  • Direction: Reversal

What Is The Bullish Engulfing Japanese Candlestick Pattern?

The Bullish Engulfing pattern is a bullish reversal pattern that typically forms after a downtrend or during a period of market consolidation.

The Japanese candlestick pattern consists of two candles.

The first candle is a bearish candle, indicating selling pressure.

The second candle is a bullish candle that opens lower than the close of the first candle and closes higher than the open of the first candle, fully engulfing the body of the first candle.

What Is The Psychology Behind The Bullish Engulfing Pattern?

The Bullish Engulfing pattern reflects a shift in market sentiment from bearish to bullish.

Initially, the bears are in control, pushing the price lower with the first bearish candle. However, the appearance of the bullish engulfing candle signifies that buying pressure has increased significantly and has overcome the selling pressure, hinting at a potential trend reversal.

This pattern indicates that buyers have taken control and are driving prices higher, potentially leading to a bullish trend reversal.

A great option for a Book Lover Great one for reading Comes with Proper Binding
Japanese Candlestick Charting Techniques, Second Edition

Now retrieving the rating.

47% Off $115.00 $61.43 (as of 05/20/2025 16:59 GMT -04:00 – More infoProduct prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on [relevant Amazon Site(s), as applicable] at the time of purchase will apply to the purchase of this product.)
A great option for a Book Lover Great one for reading Comes with Proper Binding

How To Trade The Bullish Engulfing Pattern?

To trade the Bullish Engulfing pattern, wait for confirmation by the second candle.

The buy trigger occurs when the second bullish candle closes above the high of the first bearish candle, confirming the pattern.

Place a stop loss order below the low of the bullish engulfing candle to protect against potential false breakouts or reversals.

As the price moves in your favor, consider using trailing stops or other risk management techniques to lock in profits and minimize potential losses.

Additional Tips

While the Bullish Engulfing pattern can be a reliable bullish reversal signal, it is essential to use it in conjunction with other technical indicators and chart patterns to confirm the trend change.

Additionally, be aware of the overall market context and consider factors such as support and resistance levels, as well as the strength of the prevailing trend.

Keep in mind that no single pattern can guarantee a trend reversal, and proper risk management is always necessary.

Continue to learn about Japanese candlesticks through books, such as Steve Nison’s  “Japanese Candlestick Charting Techniques” and “Beyond Candlesticks.” 

FacebookTweetPin

Related

Continue Reading

Previous: Keltner Channels
Next: Bullish Harami

Recent Posts

  • What Are Trends in Crypto? How to Identify and Trade Different Types of Crypto Trends
  • Bollinger Bands
  • Moving Average Convergence/Divergence (MACD)
  • Relative Strength Index (RSI)
  • Hurst Cycle Theory: Understanding Bitcoin Cycles
  • About
  • Affiliate Disclosure
  • Privacy Policy
  • Terms & Conditions
  • Featured
  • Japanese Candlesticks
  • Chart Patterns
  • Technical Indicators & Oscillators
Copyright CoinChartist.io © All rights reserved.