Bearish Engulfing Candlestick Pattern — Meaning & How to Trade It | Venor Markets
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Technical Analysis · Bearish Reversal

Bearish Engulfing

A Bearish Engulfing pattern is a two-candle bearish reversal where a large bearish candle's body completely engulfs the smaller bullish candle before it.

Bullish candle Bearish candle Highlighted = the pattern itself
Category
Bearish Reversal
Signal
Sell
Reliability
★★★★★
Candles Involved
2
What does it signal?

Sellers decisively overwhelmed buyers within a single session — one of the most widely recognized top-reversal signals in technical analysis.

How to identify a Bearish Engulfing
  • Forms after an uptrend.
  • First candle is a small-bodied bullish candle.
  • Second candle is bearish and its body opens above (or at) and closes below the first candle's entire body.
How to trade a Bearish Engulfing
  • Many traders enter short on the close of the engulfing candle or on a retest of its body.
  • Stop-loss is commonly placed above the high of the engulfing candle.

Educational only — not financial advice. Combine any candlestick pattern with broader market context, risk management, and your own trading plan.

FAQ

Common questions

It's one of the more dependable single-setup reversal patterns, especially after an extended uptrend and on elevated volume.

Related

More Bearish Reversal patterns