Engulfing Patterns

Engulfing patterns are powerful two-candle reversal patterns. The second candle completely "engulfs" the body of the first, showing a dramatic shift in momentum.

Requirements:
1. First candle is bearish (red)
2. Second candle is bullish (green)
3. Second body COMPLETELY covers first body

What it means: Sellers had control, then buyers overwhelmed them completely.
Signal: Strong bullish reversal.
Nickname: "The Swallow" or "Bull Trap Escape"

Requirements:
1. First candle is bullish (green)
2. Second candle is bearish (red)
3. Second body COMPLETELY covers first body

What it means: Buyers were in control, sellers took over violently.
Signal: Strong bearish reversal.
Nickname: "The Devour" or "Bear Trap Escape"

A rare variation where a candle engulfs the PREVIOUS engulfing pattern:

Candle 1 → Candle 2 (engulfs 1) → Candle 3 (engulfs 2)

Signal: Continuation of the direction of candle 3. Very powerful.

The larger the engulfing candle compared to the first:
- Just covers: Moderate signal
- 2x size: Strong signal
- 3x+ size: Very strong signal

Also watch volume - engulfing patterns on high volume are more reliable.