4.0 Bullish engulfing pattern explained Video Lecture | Forex: Learn and Master Trading (English) - Business Basics

welcome back to capex forex trading comm
in today's lesson we're going to discuss
a reversal pattern called a bullish
engulfing pattern so the bullish
engulfing pattern comprises of two
candles the first prior black candle
that you can see here and the second
bigger and longer white candle now the
bullish engulfing pattern always occurs
at the bottom of a downtrend and this is
why it's called a reversal pattern
because it reverses the current trend or
the current downtrend that's currently
taking place in the market the main rule
with the bullish engulfing pattern is
that the second candle ie the big long
white candle engulfs the first black
candle now the first black candle can be
anything it can be a spinning top it can
be a doji as long as it is a black
candle of some sort and it is engulfed
by the long white candle which appears
after it then this qualifies as a
bullish engulfing pattern the one thing
you don't need to worry about is that
the body of the white candle engulfs or
covers the shadows or the wicks of the
prior black candle as long as the white
candle body engulfs the black candle
body the pattern qualifies as a bullish
engulfing pattern now in terms of our
example we can see that the market has a
downtrend happening right here okay so
the actual size of the downtrend is not
really relevant but what is relevant is
the fact that it is a downtrend so we
can see circled in red here we've got a
long white candle and the prior black
candle now the white candle engulfs the
body of the black candle therefore that
qualifies as a reversal pattern called
the bullish engulfing pattern and you
can see from this point the market
continued to go in an upward direction
now one thing you need to bear in mind
is that do you not place a buy every
time that you see a bullish engulfing
pattern the reason why is because they
occur quite a lot and a lot more
confirmation is required for you to take
that trade which is something that we're
going to teach you later on
course but for now we just need you to
know what a bullish engulfing pattern
actually is so leave us any comments any
question and which we'll see you in the
next video