A two-candle pattern after a decline: a down candle followed by an up candle whose body completely covers the prior body.
How traders use it: Most relevant at support or after a sell-side sweep. Confirmation: continuation above the engulfing candle's high. Invalidation is often below its low.
Common mistake: Counting it in the middle of a range, or when the "engulfing" candle is only engulfing a tiny doji.
Related: Bearish engulfing · Outside bar · Three outside up / three outside down
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Concepts only. Education only, not financial advice. No pattern on this site has a published win rate.