Bullish Engulfing: Explained in 60 Seconds
A bullish engulfing is a two-candle reversal that appears after a down-move and shows buyers taking control of price.
What the pattern is
It consists of a small bearish candle followed by a larger bullish candle whose body completely covers the body of the first candle. The second candle’s close sits above the first candle’s open, and its open sits below the first candle’s close.
What forms it
The pattern can only be considered after a genuine downtrend. The first candle continues that decline, closing lower than it opened. The second candle opens inside the prior body or below it, then rallies strongly enough to finish above the prior open, swallowing the earlier candle’s range entirely.
What confirms it
Volume must rise on the bullish candle. Without that expansion, the engulfing lacks the participation needed to signal a shift in control. The pattern is also only valid once the second candle has fully closed; any entry taken before that close is premature.
How it fails
If price has not been trending lower, the engulfing loses its reversal context. If the bullish body fails to cover the prior body completely, or if volume stays flat or declines, the signal is invalid. Finally, if traders act before the candle closes, they risk entering a formation that never completes.
