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

welcome back to capex forex trading comm
in this video we're going to discuss the
opposite of the bullish engulfing
pattern the bearish engulfing pattern
the bearish engulfing pattern is also a
two candle formation and it comprises of
two candles the first candle is the
white candle that you can see here and
the second candle is the larger black
candle that you can see here now the
bearish engulfing pattern always occurs
at the top of an uptrend so it is its
purpose to turn that trend around back
into the downward direction now the rule
with the bearish engulfing pattern is
that the second black candle has to
engulf or cover the prior first white
candle now it only has to engulf the
body of the white candle rather than the
wicks no matter how long they are so the
wick this small wick that you see here
can be bigger than the black candle
itself but as long as the black candles
body engulfs the white candles body this
qualifies as a bearish engulfing pattern
now in terms of our example you can see
that we have an uptrend in the market
here and the appearance of this white
candle that you can see suggest at that
point that the uptrend is still strong
however the appearance of the black
candle and the formation of the bearish
engulfing pattern suggest that the mark
that the current uptrend rather is
running out of steam and the market
reverses in the downward direction now
what you must not do as before is place
a cell every time that you see a bearish
engulfing pattern the reason why is
because this kind of pattern occurs
regularly and it needs a lot more
confirmation for you to take the trade
now we're going to teach you how to do
this later on in the course but for now
if you have any questions or any
comments do let us know and we shall see
you in the next lesson