Engulfing Pattern
An engulfing pattern is a two-candle reversal where the second body completely covers the first, most reliable at key levels.
An engulfing pattern is a two-candle reversal where the second body swallows the first. It is most reliable at key levels after a strong move, and needs confirmation.
An engulfing pattern is a two-candle reversal pattern where the body of the second candle completely covers the body of the first, in the opposite direction. A bullish engulfing appears in a downtrend: a small bearish candle followed by a larger bullish one that swallows it. The pattern is strongest at support or resistance, after a clear move, and when it forms on higher volume. Like all reversal candlesticks, it is a warning requiring confirmation.
How It Works
- Bullish engulfing: big bullish body covers a prior small bearish body
- Bearish engulfing is the mirror image at tops
- Strength rises with level, prior trend and volume
Trading Tips
Trade engulfings at support/resistance, not mid-range
The bigger the engulfing body and the lower its wicks, the stronger the signal
Wait for a follow-through candle before committing
Related Terms
Put Your Knowledge Into Practice
Compare regulated brokers and find the best one for your trading style.