Engulfing Candle
Volume Price Analysis glossary · Testing Supply/Demand & Continuation Signals
Definition
A two-candle pattern where the second candle's body completely covers the first; bullish engulfing signals strength, bearish engulfing signals weakness.
Engulfing Candle in plain English
A candle on a chart shows one time period's price action, and its thick middle part (the "body") runs from the opening price to the closing price. In an engulfing pattern, the second candle's body is so big it completely swallows the first candle's body, like a bigger hand closing over a smaller one. A bullish engulfing (a big up-candle eating a small down-candle) says buyers just overpowered sellers, hinting price may rise; a bearish engulfing says the opposite. It's a quick visual tell that the balance of power flipped hard in one period.
Related Volume Price Analysis terms
Volume Price Analysis practice questions · Volume Price Analysis flashcards · Volume Price Analysis study guide