Hello, friends welcome to a fresh article of “Wealthsetup.com”. Here In this article, I explained What is bearish engulfing candlestick pattern and the importance of this candlestick pattern.
If you are new to the stock market and you want to learn about this pattern. You are on the right page.
Here I will clear all your doubts about this candlestick pattern.
Before start, you need to understand the basics of these patterns.
And how you can trade the stock market by using this pattern.
How To Identify Bearish Engulfing Patterns?
The bearish engulfing candlestick patterns are the most followed pattern for stock market trading.
This pattern is a combination of two candlesticks.
As you can see in the above image.
The second candle covers the first candle whole body.
It’s known as a bearish engulfing pattern.
For this pattern, the first candle must be a positive candle and the second candle must be a negative candle.
This engulfing pattern is the indication for downtrend of stock.
This candlestick pattern is very useful for all traders.
It helps to avoid the fake signals of Indicators.
Interpretation Of Pattern
According to its name, This candle pattern indicates downtrend stock.
This engulfing pattern shows you the seller interest in the market.
First small body candle is showing an uncertain position on the market.
It means the buyer and the seller don’t understand what to do.
And when a second negative candle covers the whole body first positive candle.
It is the very powerful interpretation of the downtrend.
The bearish engulfing pattern gives you 50% to 60% accuracy.
Most of the professional traders are using this pattern for trading.
I hope now you understand what is the bearish engulfing pattern and the importance of this candlestick pattern. If anyone has any query or suggestions regarding this candlestick pattern please ask in the comment section.Gashik