A bullish engulfing pattern is a two-candle formation that signals a potential reversal in price trend. It typically appears after a downtrend, indicating a shift in momentum towards the upside.The first candle is bearish, closing lower than its opening price. The second candle is bullish and fully engulfs the body of the first candle, opening below the first candle’s close and closing above its open. This shows that buyers have gained control over sellers, leading to increased buying pressure.Traders often see this pattern as a strong signal to enter long positions. It suggests that investors are becoming optimistic about the asset’s future, potentially leading to higher prices. Confirmation of the pattern is often sought through subsequent price action, such as continued upward movement in the following days.While it can be a reliable signal, it’s important to consider other factors like overall market sentiment and volume to avoid false signals.