How to realize when price reaches its top? What will we do when we realize that price is reaching its top? That’s right, open a DOWN. Bearish Engulfing Pattern – This is the best type of candle model to determine this.
How to realize Bearish Engulfing Pattern
This is a reversal pattern that shows the moment when price is about to fall. The pattern often appears at the end of an upward trend. The chart will show 2 candles:
Small green candle (1st candle): Price rises slightly
Long red candle (2nd candle): Price falls dramatically
Meanings of Bearish Engulfing Pattern
When the pattern appears, a small bullish candle (green) comes first. The second candle is a long red one, indicating a sudden decrease of price, over-taking, or engulfing the small green candle before it. We call this situation is: A sudden strong force engulfs the upward trend and makes price fall dramatically.
How to trade using Bearish Engulfing Pattern
This is a pattern that help you determine the moment price reaches its top. When you catch the pattern, you can estimate that price drops in the future. The probability is high so if you catch the pattern, you can trade a DOWN.
If you are observing one minute candle pattern, you can open a DOWN in 5 minutes. If you are observing more than 5 minute candle pattern, you can open a DOWN in a longer time frame so that your winning probability is higher.
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