Pattern name: Bearish Engulfing Pattern Type : Bearish Reversal No. of Candles : 02
How to Identify it ? 1)There must be a preceding Uptrend. 2)A short Green candle followed by a long Red candle. 3)The Red candle should opens higher & closes lower than the Green candle. 4)The Green candle should be completely engulfed by the Red candle.
Psychology behind it : 1)The Bulls lose momentum & the Bears take charge and managed to close below the Green candle. 2)It implies the bears have fully override the bulls.
How to trade it ? 1)Look for the Bearish Engulfing at the Top of the Uptrend. 2)Upon confirmation, open a Short position in the 3rd Candle. 3)Place a Stoploss above the high of the Red candle.
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