The bearish engulfing pattern
The bearish engulfing pattern is a two-candlestick sign suggesting the end of an uptrend. This phenomenon mirrors its bullish counterpart, however, it suggests taking a short position instead.
Have a glance at the chart shown below. Pay attention to the bearish engulfing pattern encircled; it is made up of two candles. It is evident that:
The process would be as follows:
– At P2, the opening price is more elevated than P1’s final rate.
– At 3:20 PM, the price on P2 is lower than P1’s open, aligning with the conditions of a bearish engulfing pattern. A logical conclusion would be that this is indeed what we are seeing.
This is strictly based on one’s willingness to accept risk.
The presence of a doji
The chart is intriguing, several experts have taken advantage of such trading chances in the past, they firmly advocate one to take the opportunity here. It can be hugely rewarding!
Have a glance at the chart, what elements grab your attention?
Several experts’ trading experiences have taught them that when a doji follows a recognizable chart pattern, the opportunity is greater. In addition to this, we would like to highlight the chart analysis methodology. It’s important to look at more than just what is shown on P1 and P2; by combining two different patterns, we gain a greater insight into market conditions.