Bullish Engulfing Pattern: Definition, Importance, Usage & Examples

We can often extract valuable insights just by looking at how a pattern plays out in the price charts. Let’s look at how the SPX behaved back in 2008 to 2009, following the housing crisis crash. Copyright © 2025 FactSet Research Systems Inc.© 2025 TradingView, Inc.

A bullish engulfing candle has a small bearish candle followed by a big bullish one. Knowing how to spot and trade this pattern can boost your trading success. In this article, we’ll explore the bullish engulfing candle in detail. We’ll cover how to identify it and use it for profitable trades. Engulfing patterns are just one of many candlestick patterns and should be used in conjunction with other technical indicators for more robust trading decisions.

How To Master The Bullish Engulfing Pattern (Example Chart Included)

It tells us that bulls are taking over after a period of bearishness. A bullish engulfing pattern should preferably be traded when it forms at key levels, or with additional confluences like a RSI divergence. The use of moving averages is another strategy that can enhance the effectiveness of the bullish engulfing pattern.

Are there any common variations or similar patterns to Bullish Engulfing?

However, when the range of the Bullish Engulfing Pattern surpasses that of the earlier candles, it indicates a robust surge in buying pressure. So, if you trade reversals, always look for a strong momentum move into an area. Built upon the foundations of our tried-and-tested trading strategies, our proprietary indicators for TradingView will give you the confidence to make well-informed trading decisions. Engulfing patterns are windows into the collective psychology of market participants—moments when the balance of power shifts decisively from one side to the other. Volume should increase on the engulfing candle—this validates the conviction behind the reversal.

How to Trade using Bullish Engulfing Candlestick in the Stock Market?

Confirmation through volume analysis or other technical indicators can further validate the pattern. A bullish engulfing candlestick pattern signals traders that the market is about to enter an uptrend after a previous decrease in prices. This reversal pattern indicates that bulls are taking control of the market and may potentially drive prices much higher, indicating the ideal opportunity to initiate a long position. This formation, where the bullish candlestick completely engulfs the previous day’s bearish candlestick, represents a bullish engulfing pattern.

Furthermore, the conviction of the bullish reversal increases based on the size of the green candle’s body. That is, the larger the body of the green candle compared to the prior red candle, the stronger the interest of the buyers in pushing the price up. As with any candlestick pattern, it’s important to observe price in context with factors like volume, to understand why a stock price is behaving like it is.

Like the bullish engulfing pattern, the bullish harami pattern is a bullish reversal pattern. Unlike the bullish version, the bearish engulfing pattern forms after an uptrend, and has a slightly different appearance. In our example on WTI (Crude Oil), we see the price make a pullback to the 50 EMA and 200 EMA on the daily timeframe.

In real-world terms, imagine Apple stock has been declining for weeks. Conversely, when a small bullish candle is overwhelmed by a larger bearish one after an uptrend, sellers are making the same declaration. Ultimately, each engulfing pattern requires traders to look at it within the context of trend momentum to better-understand entry/exit points. It forms when a green candle totally engulfs the small red candle before it.

It’s important to set stop trading systems losses based on market volatility and your risk tolerance. But on shorter times like 15-minute or 1-hour charts, it might just be a short-term change. Furthermore, the content of this article is solely the author’s personal opinion and does not necessarily constitute investment advice. The content of this article is for reference purposes only, and readers should not use this article as a basis for any investment decisions. The Bullish Bears team focuses on keeping things as simple as possible in our online trading courses and chat rooms.

There is a gap down, but the bears aren’t able to push the price very far before the bulls take command. Please refer to our Risk Disclosure Statement and Terms & Conditions so as to have a better understanding over the risks involved before you start trading. To illustrate the occurrence and implications of the Bullish Engulfing Candlestick Pattern, let’s consider a real-life example using a 30-minute chart of Bitcoin (BTC). It is therefore important to consider the limitations of the pattern and manage the risk appropriately. The ATR value at the time of our entry was 151 pips, so our stop loss will be set 302 pips away. To combat this weakness, you can opt to use the ATR (Average True Range) indicator.

Bullish Engulfing Pattern – Meaning, Examples, Trading Tips

Bearish engulfing patterns, conversely, form at the tops of uptrends, indicating that sellers have gained enough strength to overpower the buyers who’ve been in control. Although not perfect, such patterns can be a powerful indicator, especially when combined with the current trend. Following a sharp price decline, engulfing patterns are especially useful because they indicate when momentum is shifting upward.

Bullish engulfing patterns indicate strong potential for a bullish reversal, especially when they occur at key support levels or after a prolonged downtrend. However, it’s important to look at other technical factors for confirmation. Traders interpret this pattern as a signal of a shift in market sentiment, with the bulls gaining control and a possible upward price movement. It is particularly noteworthy when it appears at the end of a downtrend, potentially signaling the exhaustion of bearish momentum and the start of a bullish phase. Traders enter a long position once the price breaks above the bullish candlestick and use a candle close below the bullish candlestick as a stop level. Yes, Relative Strength Index (RSI) and bullish engulfing patterns work well together.

Majorly, this pattern is in a downtrend, but it can be seen in an uptrend too. The patterns forms with a small red candle that is completely engulfed by the next green candle. The significance of the pattern is that it signals that buyers have taken over the market after the continuous selling in the downtrend. Many conventional acciones baratas traders see this pattern as a potential buying opportunity and take long positions. Bearish engulfing candlestick pattern occurs when a small bullish candlestick is followed by a larger bearish candlestick.

Strategies to Trade the Bullish Engulfing Pattern

The bullish engulfing pattern loses money in most markets when traditionally traded. In some cases, engulfing patterns may occur due to overlapping candles or noise in the price chart, making it challenging to distinguish valid signals. To strengthen the validity of the pattern, confirmation can be sought through additional bearish signals or technical analysis tools. While the Bullish Engulfing Pattern can also be observed on lower timeframes, such as hourly or 15-minute charts, traders often give more weight to signals appearing on longer timeframes.

Traders often look for confirmation of the pattern with other technical indicators, such as volume and momentum, to increase the probability of a successful trade. One method that comes to mind is to use the ATR indicator, or the Chandelier Exit indicator. Here, we can set a risky, yet valid stop loss below the lowest of the bullish engulfing pattern (give it some room), and wait for our price targets to be hit. Then, as we enter a new trading day, the price opens much lower – creating a gap. The bearish candle real body of Day 1 is usually contained within the real body of the bullish candle of Day 2. As established, a Bullish Engulfing Pattern suggests a temporary ascendancy of buyers.

Traders need to tell the bullish engulfing candle apart from other patterns. Patterns like the piercing line or the morning star also show bullish signs. The second is a bullish candle that covers the first one, indicating buying power. The price is below the 50-day moving average with a bearish candle followed by a large bullish candle engulfing the previous.

That’s why one of the biggest drawbacks of bullish engulfing is it gives many false signals at times. One fxcm canada review needs to use it in conjunction with other trade theories to find accurate trades. The bullish Engulfing pattern and Bearish Engulfing Pattern are just opposites of each other. Unlike the bullish engulfing, the bearish engulfing signals the start of a downtrend. To set good stop losses for the bullish engulfing candle, place stops below the engulfing candle’s low.

Posted: May 26, 2022 12:53 pm


According to Agung Rai

“The concept of taksu is important to the Balinese, in fact to any artist. I do not think one can simply plan to paint a beautiful painting, a perfect painting.”

The issue of taksu is also one of honesty, for the artist and the viewer. An artist will follow his heart or instinct, and will not care what other people think. A painting that has a magic does not need to be elaborated upon, the painting alone speaks.

A work of art that is difficult to describe in words has to be seen with the eyes and a heart that is open and not influenced by the name of the painter. In this honesty, there is a purity in the connection between the viewer and the viewed.

As a through discussion of Balinese and Indonesian arts is beyond the scope of this catalogue, the reader is referred to the books listed in the bibliography. The following descriptions of painters styles are intended as a brief introduction to the paintings in the catalogue, which were selected using several criteria. Each is what Agung Rai considers to be an exceptional work by a particular artist, is a singular example of a given period, school or style, and contributes to a broader understanding of the development of Balinese and Indonesian paintng. The Pita Maha artist society was established in 1936 by Cokorda Gde Agung Sukawati, a royal patron of the arts in Ubud, and two European artists, the Dutch painter Rudolf Bonnet, and Walter Spies, a German. The society’s stated purpose was to support artists and craftsmen work in various media and style, who were encouraged to experiment with Western materials and theories of anatomy, and perspective.
The society sought to ensure high quality works from its members, and exhibitions of the finest works were held in Indonesia and abroad. The society ceased to be active after the onset of World War II. Paintings by several Pita Maha members are included in the catalogue, among them; Ida Bagus Made noted especially for his paintings of Balinese religious and mystical themes; and Anak Agung Gde Raka Turas, whose underwater seascapes have been an inspiration for many younger painters.

Painters from the village of Batuan, south of Ubud, have been known since the 1930s for their dense, immensely detailed paintings of Balinese ceremonies, daily life, and increasingly, “modern” Bali. In the past the artists used tempera paints; since the introduction of Western artists materials, watercolors and acrylics have become popular. The paintings are produced by applying many thin layers of paint to a shaded ink drawing. The palette tends to be dark, and the composition crowded, with innumerable details and a somewhat flattened perspective. Batuan painters represented in the catalogue are Ida Bagus Widja, whose paintings of Balinese scenes encompass the sacred as well as the mundane; and I Wayan Bendi whose paintings of the collision of Balinese and Western cultures abound in entertaining, sharply observed vignettes.

In the early 1960s,Arie Smit, a Dutch-born painter, began inviting he children of Penestanan, Ubud, to come and experiment with bright oil paints in his Ubud studio. The eventually developed the Young Artists style, distinguished by the used of brilliant colors, a graphic quality in which shadow and perspective play little part, and focus on scenes and activities from every day life in Bali. I Ketut Tagen is the only Young Artist in the catalogue; he explores new ways of rendering scenes of Balinese life while remaining grounded in the Young Artists strong sense of color and design.

The painters called “academic artists” from Bali and other parts of Indonesia are, in fact, a diverse group almost all of whom share the experience of having received training at Indonesian or foreign institutes of fine arts. A number of artists who come of age before Indonesian independence was declared in 1945 never had formal instruction at art academies, but studied painting on their own. Many of them eventually become instructors at Indonesian institutions. A number of younger academic artists in the catalogue studied with the older painters whose work appears here as well. In Bali the role of the art academy is relatively minor, while in Java academic paintings is more highly developed than any indigenous or traditional styles. The academic painters have mastered Western techniques, and have studied the different modern art movements in the West; their works is often influenced by surrealism, pointillism, cubism, or abstract expressionism. Painters in Indonesia are trying to establish a clear nation of what “modern Indonesian art” is, and turn to Indonesian cultural themes for subject matter. The range of styles is extensive Among the artists are Affandi, a West Javanese whose expressionistic renderings of Balinese scenes are internationally known; Dullah, a Central Javanese recognized for his realist paintings; Nyoman Gunarsa, a Balinese who creates distinctively Balinese expressionist paintings with traditional shadow puppet motifs; Made Wianta, whose abstract pointillism sets him apart from other Indonesian painters.

Since the late 1920s, Bali has attracted Western artists as short and long term residents. Most were formally trained at European academies, and their paintings reflect many Western artistic traditions. Some of these artists have played instrumental roles in the development of Balinese painting over the years, through their support and encouragement of local artist. The contributions of Rudolf Bonnet and Arie Smit have already been mentioned. Among other European artists whose particular visions of Bali continue to be admired are Willem Gerrad Hofker, whose paintings of Balinese in traditional dress are skillfully rendered studies of drapery, light and shadow; Carel Lodewijk Dake, Jr., whose moody paintings of temples capture the atmosphere of Balinese sacred spaces; and Adrien Jean Le Mayeur, known for his languid portraits of Balinese women.

Agung Rai feels that

Art is very private matter. It depends on what is displayed, and the spiritual connection between the work and the person looking at it. People have their own opinions, they may or may not agree with my perceptions.

He would like to encourage visitors to learn about Balinese and Indonesian art, ant to allow themselves to establish the “purity in the connection” that he describes. He hopes that his collection will de considered a resource to be actively studied, rather than simply passively appreciated, and that it will be enjoyed by artists, scholars, visitors, students, and schoolchildren from Indonesia as well as from abroad.

Abby C. Ruddick, Phd
“SELECTED PAINTINGS FROM THE COLLECTION OF THE AGUNG RAI FINE ART GALLERY”


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