When does the bullish engulfing work best?

In Fred's tests the best version was on USDJPY, on the 1-hour chart, in the overnight (midnight–7am UK), after price has been falling. It averaged +17% of the risk per trade over 334 trades, and made money in both 2020–23 and 2024–26.

Tested patterns · Buy setup

Does the bullish engulfing work? Tested on 191,228 trades

Q: Does the bullish engulfing work?

Not on its own, but 2 filtered versions did. Across 191,228 bullish engulfing trades on 8 markets from 2020 to 2026, after real broker spreads, the setup averaged −10% of the risk per trade (−£0.96 per £10 risked) and reached a 1.5× take profit 33.2% of the time.

Not on its own, but 2 filtered versions did. Across 191,228 bullish engulfing trades on 8 markets from 2020 to 2026, after real broker spreads, the setup averaged −10% of the risk per trade (−£0.96 per £10 risked) and reached a 1.5× take profit 33.2% of the time.

What it is: A green candle whose body swallows the previous red candle's body, after a fall.

Older years vs recent years

2020 to 2023: −8% per trade over 114,170 trades. 2024 to 2026: −12% per trade over 77,058 trades.

The versions that made money

These made money in both 2020–23 and 2024–26, which is how Fred rates a setup green. Each uses its own best stop and take profit.

USDJPY · 1-hour chartovernight (midnight–7am UK), after price has been falling+17% per trade · 45% hit target · 334 trades

USDJPY · 15-minute chartovernight (midnight–7am UK), after price has been falling+8% per trade · 35% hit target · 1,017 trades

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By market

Market	Trades	Per trade	Hit take profit
US30 (Dow)	23,040	−4%	35.4%
Gold (XAUUSD)	24,881	−6%	34.8%
USDJPY	27,215	−6%	34.6%
NAS100 (Nasdaq)	5,886	−7%	34.3%
AUDUSD	26,911	−12%	32.7%
EURUSD	28,030	−12%	32.2%
GBPUSD	28,414	−13%	32%
GBPJPY	26,851	−13%	31.1%

By timeframe

Chart	Trades	Per trade	Hit take profit
5-minute	133,869	−11%	32.6%
15-minute	46,027	−7%	34.1%
1-hour	11,332	−3%	37%

How Fred tested it

Every time the setup appeared on MT5 price history from 2020 to 2026, Fred entered at the next candle's open, paid the real spread, placed the stop just past the pattern (plus half an average candle) and a take profit 1.5 times the risk. If neither was hit within 48 candles, the trade closed at the last price. "Per trade" is the average result as a share of the amount risked.

Back-tested results, not live trading. Past results don't guarantee future ones. Checked 28 October 2026. All tested patterns · AI chart tools compared