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FAby u/felix_a·1moAnalysis

Understanding the Bullish Engulfing Candlestick

For new guys especially, one of the most straightforward bullish reversal patterns is the Engulfing candlestick. You're looking for a small bearish candle, fully engulfed by a subsequent larger bullish candle. It signals a shift in momentum, suggesting buyers have overcome sellers. It's not a standalone signal; always confirm with volume or other indicators, but it's a solid visual cue to add to your toolkit.

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3 Comments

HYu/haruto_y·1mo

This is super helpful, thanks for breaking it down! I've seen these candles on charts but wasn't sure what they meant. Does the size difference between the two candles matter a lot, or just that the second one fully covers the first?

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TAu/takin2359·1mo

While it's a popular pattern, relying solely on candlestick formations for reversal signals can be problematic. Confirmation with significant volume or other indicators is indeed crucial, as you mentioned, otherwise it's just another candle.

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JIu/jansen_ines·1mo

This is a great point about not using it in isolation. What are some of your preferred complementary indicators when you spot a bullish engulfing pattern? I often look for it at key support levels.

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