## Understanding Bearish Engulfing and Bullish Engulfing Patterns in Candlestick Analysis

**What is an Engulfing Pattern?**

An engulfing pattern is a candlestick formation where the body of the previous candle is completely covered or engulfed by the body of the next candlestick. It is important to remember that shadows (wick) are not included in the calculation; only the candlestick bodies are considered in this pattern. To form a valid signal, two fundamental conditions must be met: first, a trend must already be in place, whether bullish or bearish, and second, there must be two candlesticks with specific characteristics that form the engulfing pattern.

**Bearish Engulfing: A Signal of Reversal to a Downtrend**

A bearish engulfing appears when the trend is bullish and market dynamics change. In this condition, the first candlestick has a small green (bullish) body, but the following candlestick comes with a red (bearish) body that completely covers the previous candlestick's body.

To accurately identify a bearish engulfing, pay attention to these three criteria:
- The length of the bearish candlestick's body must be larger than the previous bullish candlestick's body
- The low price of the bearish candlestick must be lower than the low price of the previous bullish candlestick
- The close price of the bearish candlestick is below the low price of the previous bullish candlestick (this condition is not always necessary)

**Bullish Engulfing: A Signal of Reversal to an Uptrend**

Conversely, a bullish engulfing forms during a bearish trend. Here, the first candlestick has a small red (bearish) body, followed by a candlestick with a large green (bullish) body that fully covers the previous candlestick's body.

The criteria for recognizing a bullish engulfing include:
- The length of the bullish candlestick's body is larger than that of the previous bearish candlestick
- The high price of the bullish candlestick surpasses the high price of the previous bearish candlestick
- The close price of the bullish candlestick is above the high price of the previous bearish candlestick (this is not mandatory but often occurs)

**Usefulness of This Pattern in Trading**

Both engulfing patterns indicate significant changes in market sentiment. The bearish engulfing signals sellers taking control, while the bullish engulfing shows buyers regaining dominance. The combination of these two candlestick structures provides traders with valuable insights into the potential reversal of market direction.