WickCheck / Trading school / Engulfing candle
Engulfing candleBeginner
A candle whose body fully covers the previous candle's body, in the opposite colour.
What it means
A bullish engulfing after a sweep of a low is a classic reversal signal. On its own, across all bars, it is weak; at a level and in a session it gets more interesting.
How to spot it
- Body of candle 2 covers body of candle 1, opposite direction.
Common mistakes
- Trading every engulfing candle in the middle of a range.
Related terms
CandlestickOne bar of price: open, high, low and close for a period of time.…Liquidity sweepPrice trades beyond a high or low, triggers the stops there, and closes back ins…Pin barA candle with a small body and one long wick, showing a sharp rejection.…
Why most strategies need a human behind the screen
Read the lessonWhat a mechanical test can and cannot tell you about smart money concepts.
Education only, not financial advice. Definitions vary between teachers; these are ours, written for clarity.