Engulfing Pattern Explained: Bullish and Bearish Engulfing Candles Made Simple

Ever see one candle just swallow the candle before it whole? That's the engulfing pattern, one of the most popular candlestick patterns. It's a two candle pattern where the second candle's body fully covers the first candle's body. A bullish engulfing shows up after a decline, with a small red candle followed by a big green candle that engulfs it. A bearish engulfing is the mirror image after a rise, with a small green candle followed by a big red one. In this video you'll learn why most traders compare bodies instead of wicks, why location matters so much (at support or resistance, or after a clear move, not in the middle of a range), and what makes the pattern stronger: the size of the engulfing candle, volume if your market shows it, and a key level. We also cover confirmation with the next candle, how some traders use the pattern with an entry, a stop beyond the engulfing candle's low or high and a target at the next level, plus a full worked example of roughly 2 to 1. Finally we look at the most common mistakes, a quick recap and a note on risk. An engulfing pattern is a clue, not a guarantee.