Previous Page

Engulfing Pattern

AnalyticsTrade Team
AnalyticsTrade Team Last updated on 1 May 2023

Table of Contents

Engulfing Pattern

An engulfing pattern is a technical analysis term used to describe a situation in which a short-term price trend is reversed by a single candle. It is a two-candle pattern that consists of a small candle followed by a larger candle that completely “engulfs” the smaller one. The engulfing pattern is a strong indication that the trend is about to reverse. It is often used by traders to identify potential entry and exit points in the market.

History of the Engulfing Pattern

The engulfing pattern was first described by Japanese candlestick charting pioneer, Homma Munehisa, in the 1700s. He used the pattern to identify potential reversals in the rice markets. Since then, the engulfing pattern has become a popular tool for technical analysis and is used by traders in a variety of markets, including stocks, commodities, and currencies.

Comparison Table

Pattern Reversal
Engulfing Yes
Doji No
Hammer Yes
Shooting Star No

Summary

The engulfing pattern is a technical analysis tool used to identify potential reversals in the market. It is a two-candle pattern that consists of a small candle followed by a larger candle that completely “engulfs” the smaller one. The engulfing pattern is a strong indication that the trend is about to reverse. For more information about the engulfing pattern, traders can visit websites such as Investopedia, TradingView, and StockCharts.

See Also

  • Doji
  • Hammer
  • Shooting Star
  • Harami
  • Dark Cloud Cover
  • Piercing Line
  • Morning Star
  • Evening Star
  • Three White Soldiers
  • Three Black Crows

Do you like the post? Share it now:

AnalyticsTrade Team

AnalyticsTrade Team

🎉 Introducing AnalyticsTrade's exceptional team of expert analysts! 🌟 These seasoned pros have been dominating the capital market, trading a diverse range of assets for more than 15 years! 📈💹 Get ready to level up your game with our top-notch, captivating resources in the capital market! 🚀📚

Was this article helpful?

X

Thank You for Contacting Us!

Your email has been successfully submitted and we will get in touch with you shortly