What is Bullish engulfing? — chart signal explained
A two-candle pattern. The first candle closes down (red), and the very next one closes up (green) with a body large enough to completely cover the previous candle's body. The "body" is the thick part of the candle between its open and close.
When does it fire? — BaroBara criteria
It lights up when the prior candle is red (close below open), the current candle is green, and the green body fully wraps the red one — this candle's close is at or above the prior open, and its open is at or below the prior close.
How traders usually read it
Many traders see it as sellers driving the price down and buyers forcefully flipping the move within a single candle — so they take it as a hint that a decline may be starting to turn upward.
What to watch out for
Only the bodies are compared, so candles that look far less impressive once you include the wicks still qualify. One big bounce followed by more selling is common, and the same shape means very different things after a long slide versus in the middle of sideways chop.
What the data actually shows (BTC 4h)
The common reading is a bounce (up) — but what actually happened matters more. This signal has fired 1741 times on BTC 4h; across the most recent 300, price reached the small target (+0.25%) first about 47% of the time. Widen the target to ±1% and it becomes about 51%. A historical probability, not a guaranteed direction — and it shifts with market regime.
Odds and expected value — with symmetric target and stop (±)
Exactly the barobara framing: which side got hit first, +X% or −X%. Target and stop are set to the same %, and the win rate is how often the upside (+X%) was reached first.
| Target = stop (±) | Win rate (+ first) | EV (before fees) |
|---|---|---|
| ±0.25% | 47% | -0.02% |
| ±0.5% | 51% | +0.01% |
| ±0.75% | 55% | +0.08% |
| ±1% | 51% | +0.02% |
| ±1.5% | 49% | -0.03% |
| ±2% | 48% | -0.08% |
Broken down by market regime
⚠️ This table uses a different basis than the symmetric (±) table above — a small +0.25% target with a wide −3.0% stop (fees included). The small target makes the win rate look high while EV is often negative — exactly what signal groups hide. And the same signal behaves differently across regimes.
| Regime | Win rate (+0.25% target) | EV (−3.0% stop) | Sample |
|---|---|---|---|
| Bear market | 90% | -0.15% | N=573 |
| Sideways | 88% | -0.17% | N=546 |
| Bull market | 88% | -0.20% | N=602 |
Recent occurrences
How far price actually moved the last few times this signal fired (MFE = maximum favorable excursion).
| Date | MFE | Result |
|---|---|---|
| 2026-06-25 | 1.92% | ✅ hit |
| 2026-06-27 | 0.02% | — 🔴 stopped |
| 2026-06-29 | 0.25% | ✅ hit 🔴 stopped |
| 2026-07-01 | 5.07% | ✅ hit |
| 2026-07-01 | 3.75% | ✅ hit |
| 2026-07-02 | 3.15% | ✅ hit |
| 2026-07-02 | 2.64% | ✅ hit |
| 2026-07-03 | 2.77% | ✅ hit |
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