Engulfing Candlestick Pattern Explained

the engulfing candlestick pattern is a powerful price action signal used by traders to identify potential reversals in the market. it consists of two candles:

🟢 bullish engulfing
* occurs during a downtrend
* the first candle is bearish (red)
* the second candle is bullish (green) and completely engulfs the body of the first candle
* it signals a potential reversal to the upside


🔴 bearish engulfing
* occurs during an uptrend
* the first candle is bullish (green)
* the second candle is bearish (red) and completely engulfs the body of the first candle
* it signals a potential reversal to the downside


📍 key points to remember
* the second candle must fully engulf the body (not just the wicks) of the first candle
* higher volume during the engulfing candle increases its reliability
* it works best when combined with support and resistance levels or trendlines

💡 confirmation
always wait for confirmation before entering a trade. for bullish engulfing, a break above the high of the engulfing candle is ideal. for bearish engulfing, a break below the low adds strength to the signal.

📈 How to use it ?
many traders use this pattern as part of their entry or exit strategy. combining engulfing patterns with indicators like rsi, moving averages, or trend filters can improve accuracy.

⚠️ risk management
like any pattern, engulfing candles are not 100% accurate. always use proper risk management and stop-loss placement to protect your capital.

Disclaimer :
This Video is not financial advice, it's for educational purposes only highlighting the power of coding( pine script) in TradingView, I am not a SEBI-registered advisor. Trading and investing involve risk, and you should consult with a qualified financial advisor before making any trading decisions. I do not guarantee profits or take responsibility for any losses you may incur.