Remember this phrase and you'll profit: "At the end of a trend, engulfment appears, and the yin-yang reversal force is strong; volume confirmation is the essence, and stop-loss at the extreme point guards the door."

The engulfing pattern is the most ferocious reversal signal in candlestick analysis. Why is it so powerful? Because it uses two candlesticks to vividly depict the reversal process of bullish and bearish forces.

**What is the engulfing pattern?**

Two candlesticks of opposite colors. The second must completely "consume" the body of the first (shadows don't count). Imagine a battle—new forces not only repel the enemy but also occupy the entire position of the opponent. This is a clear reversal signal.

**Two types, completely different meanings**

Engulfment at the end of an uptrend → bearish signal. Engulfment at the end of a downtrend → bullish signal. But there's a trap: in a ranging market, "engulfment" is mostly noise, don't be fooled.

**Key details of the engulfing pattern**

Pay close attention to the engulfment of the real body; shadows can be ignored. But if the shadows are also engulfed, the signal is even stronger. The volume of the second candlestick must significantly increase—that's the only standard to verify the authenticity of the signal. Increased volume indicates large-scale capital turnover, and the market has reached a consensus. The more solid the second candlestick's body, the stronger the reversal force.

**How to trade without losing money?**

First step is crucial: confirm that this pattern truly appears near the end of a trend. Many people see "engulfment" in a ranging market and get excited, only to get cut.

Second step: wait for the second candlestick to close, confirming the body is fully engulfed. Only then is the pattern truly valid. Guessing during trading? That's suicide.

Only after the pattern is fully confirmed is your opportunity to exit.