Engulfing candle

A candle whose body completely covers the previous candle's body in the opposite direction, showing one side taking control.

Engulfing candles are most informative straight after an extended run, where they show one side being overwhelmed rather than simply continuing.

Check what the second candle closed through. Engulfing the prior body while also clearing a swing point is a far stronger event than engulfing a body mid-range.

Taught in

Spotting Your First PatternsChart Patterns

The four patterns you'll see constantly: doji, hammer, shooting star, and engulfing.

Also covered in that lesson

DojiA candle whose open and close are almost identical, leaving little or no body — a period that ended in a draw.HammerA candle with a small body near the top and a long lower wick, appearing after a decline — buyers rejected lower prices.Shooting starA candle with a small body near the bottom and a long upper wick, appearing after an advance — sellers rejected higher prices.

Related terms

Body Doji