An engulfing is two candles where the second's real body (open to close) completely covers the first's real body, in the opposite colour. The shadows, meaning the day's high and low, aren't part of the test.
What it represents: the side that lost yesterday not only recovered, it pushed past where yesterday started. In a bullish engulfing, price passes yesterday's open and closes above it.
Context is what makes it mean anything:
* **After a decline, at support:** bullish engulfing, buyers taking control.
* **After a rally, at resistance:** bearish engulfing, sellers taking control.
* **Mid-range, with no nearby level:** it's just a volatile day.
It's commonly treated as stronger when the engulfing body is large relative to recent candles, and it still benefits from confirmation by the next session.
For people who trade these: do you require the engulfing candle to close beyond a level, or is the pattern at the level enough?
