Many traders make a good living catching changes in the trend. Catching a trend change means trying to pick the top or bottom of a trending move. It is not easy but it can be highly rewarding if done correctly. Bullish and bearish Engulfing Candlestick Pattern is one of the most popular patterns used by these type of traders to anticipate a trend reversal.
This is a two stick pattern meaning it takes two days for the pattern to develop. The pattern’s name comes from the fact that the signal day completely engulfs the setup day. So the candle body and the wick on the signal day engulfs the candle body and wick on the setup day.