Double Japanese Candlestick Patterns
These are patterns that give signals consisting of two price candles that form between them a potential reversal area for the current trend in the market.
Engulfing candle pattern (reversal)
It is a reversal pattern consisting of two candles that can be positive or negative. The positive pattern comes at the end of a downward price trend and is a bullish candle with a large body that engulfs the previous bearish candle.
The larger the body of the bullish candle, the greater its engulfment of the previous candle, and thus the strength of the bullish pattern increases and it is able to reverse the price direction upwards, especially if the pattern comes at a strong support level or at the end of an extended downtrend or both, which increases the chances of a reversal.
While the negative engulfing candle pattern comes at the end of an uptrend and is a bearish candle with a large body that engulfs the previous candle, which is bullish.
The larger the body of the bearish candle, the greater its engulfing of the previous candle, and thus the strength of the bearish pattern increases and it is able to reverse the price direction downwards, especially if the pattern comes at a strong resistance level or at the end of an extended upward trend or both, which increases the chances of a reversal.
