WEBVTT

0
00:10.040 --> 00:15.870
The bearish engulfing pattern is just the opposite of the bullish engulfing pattern.

1
00:15.960 --> 00:18.050
Let's have a look at the properties.

2
00:18.390 --> 00:24.620
First of all it is a two candle pattern. Then the market must be in an uptrend

3
00:24.620 --> 00:32.460
this time. The first candle then must be green in line with the previous trend that is up and the second

4
00:32.460 --> 00:34.350
candle must be red.

5
00:34.680 --> 00:42.030
The real body of the second Candle must surround the real body of the first candle. And last one is

6
00:42.060 --> 00:47.060
that the position of the shadows on either candles doesn't matter.

7
00:47.350 --> 00:54.630
So if you got the logic of the bullish engulfing pattern, the bearish engulfing pattern will be very easy

8
00:54.630 --> 00:56.310
for you.

9
00:56.320 --> 01:01.720
Let's follow this example on dollar-swiss franc, 4-hour chart.

10
01:01.830 --> 01:09.030
The trend is clearly up but at one point there's a bearish engulfing pattern that is a clear signal

11
01:09.060 --> 01:15.320
that sellers are strong at that price and might have the power to change the trend.

12
01:15.990 --> 01:23.520
Just a quick tip to increase the likelihood that the engulfing pattern will succeed. The engulfing pattern

13
01:23.760 --> 01:28.650
becomes more significant if the first candle has a very small body

14
01:28.710 --> 01:32.940
and the second candle has a very long real body.

15
01:32.940 --> 01:40.040
This is because the first candle reflects a dissipation of the prior trend's force and the large second

16
01:40.050 --> 01:44.330
real body shows an increase in force behind the new move.