Beginner's Guide For Traders About Bearish Engulfing Candlesticks ?
The Bearish Engulfing Candlestick pattern can be very powerful if you identify them in the right place.
Before we get onto where to find them, you need to know what they look like first. When the price is rallying upwards and forms a candle which closes below the open of the previous candle, like the image above, that is a bearish engulfing candle.
This candle tells us that the bears (sellers) have taken over the market, but only tells us if this occurs at a significant zone in the market. In this case, if a bearish engulfing candle occurs at a resistance zone, it’s a valid sell signal.
This candlestick does work better with higher timeframes, so it will be more effective on the daily chart and 4H chart rather than the 1H and 15M chart.
These candlesticks can suggest a retracement (pullback), that’s why it’s important to look for them at zones. This will give you a confirmation that the price is reversing and that the bears are taking over!
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