As its name says, it is bearish candlestick pattern.
If it forms in an uptrend, it has strong reversal sign.
It forms out of 2 candlesticks.
The first one is green candlestick that is being fully engulfed by red candlestick that is closing below green’s opening.
The perfect bearish engulfing forms when the high of red one is above the high of the green one, the low of red one is below the low of green one, the opening price of the red one is above the closing price of the green one and the closing price of the red one is below opening price of the red one.
While some will try to encourage you to believe in and trade only perfect setups, if the closing price is below the opening price of the green one, it still has the same meaning as the perfect one because the green candlestick got engulfed which is the main point of this candlestick pattern and its meaning.
If you try to merge these two candlestick, you will get great example of bearish pin bar which is clear bearish sign.
Milos is an independent trader, with a background in journalism and publishing. Nomadic by nature, he’s lived in four different countries this decade. He’s fascinated by Blockchain technologies’ potential to reshape all aspects of our lives. Milos got into Bitcoin while completing his degree and hasn’t looked back since, writing about anything crypto-related. He is the co-founder of the Cryptoaims and he has a strong passion to educate people about this revolutionary technology.