A Bullish Engulfing pattern is two candles: a smaller down candle followed by a larger up candle whose body completely engulfs the previous one. It shows buyers overwhelming the prior selling in a single session, often at the end of a downtrend.
How traders read it
- Read it as a strong bullish reversal signal.
- The more fully the second candle engulfs the first, the better.
- Higher volume on the engulfing candle adds conviction.
See it in dtcharts
Turn on candlestick pattern detection in the dtcharts terminal — every bullish engulfing pattern is marked on the chart with its historical reliability score, so you can judge how often it has actually played out.