
21/07/2025
Mastering Reversal Candles: Engulfing Patterns & Gap Signals Every Trader Should Know.
1. Bearish Engulfing Pattern (Top Left)
Appearance: A large red candle completely engulfs the previous small green candle.
Trend Context: Forms at the top of an uptrend.
Signal: Strong bearish reversal — selling pressure overwhelms buying momentum.
2. Bullish Engulfing Pattern (Top Right)
Appearance: A large green candle fully engulfs the preceding red candle.
Trend Context: Occurs at the bottom of a downtrend.
Signal: Bullish reversal — buyers take control after sustained selling.
3. Downside Tasuki Gap (Bottom Left)
Appearance: Two red candles form a gap down, followed by a green candle that partially fills the gap.
Trend Context: Appears during a downtrend.
Signal: Continuation or reversal (context-sensitive) — the green candle suggests a possible temporary recovery or bullish attempt to fill the gap.
4. Downside Gap Three Methods (Bottom Right)
Appearance: A red candle gap down is followed by a small green candle, then a larger red continuation candle.
Trend Context: Occurs in a downtrend.
Signal: Bearish continuation may fail if buyers step in after gap — can also suggest a potential reversal if the gap is closed strongly.
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