What is a Bearish Engulfing Pattern?

The bearish engulfing pattern consists of two candles and is characterized as a trend reversal pattern. It is typically found after the market has experienced an upward movement.

The bearish engulfing pattern is formed when a black real body fully covers ("engulfs") the prior candlestick's white real body. The wicks of the prior candlestick may not be engulfed. Such an event signifies the control of sellers over the market.

Depending on the sizes of the candles, the importance of the pattern is determined. For example, if the white candle is much smaller than the black candle, then the strength of the signal the pattern sends is higher.

When the currency pair closes in the bearish engulfing pattern, then traders tend to sell the currency pair.

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