Engulfing Pattern
A candle whose body completely covers the previous candle's body, reversing the prior period's result outright.
Also called: bullish engulfing · bearish engulfing · outside bar
What it means
A bullish engulfing candle opens at or below the previous close and closes at or above the previous open, so its body swallows the body before it. The claim is a decisive handover: whatever the prior period settled, this one overturned.
Body matters, not range. A candle with long wicks that merely spans the previous candle is an outside bar, not an engulfing pattern — the engulfing claim is about where the two periods CLOSED relative to where they opened.
Size relative to recent candles decides whether it is informative. An engulfing candle that is barely larger than its neighbour is a coin flip; one that dwarfs the preceding range is a different event.
How OptionLab Pro’s engine uses it
In the live engine
A closely related pattern, the Kicker, requires BOTH candles to have a body-to-range ratio of at least 0.50 — a decisive handover between two candles that were themselves decisive, rather than between two mostly-wick bars that happen to nest. Engulfing-family patterns feed the Tier-A set that the location multiplier applies to, so the same formation scores differently inside a Smart Money zone than in open space.
go/internal/engine/candles.go (Kicker body/range >= 0.50, location multiplier)The common mistake
Where traders get this wrong
Using the full range instead of the body. By that definition almost any volatile bar engulfs its neighbour, and the pattern stops meaning anything. The second mistake is ignoring relative size — engulfing a tiny candle is not the decisive handover the pattern is supposed to describe.
Go deeper
There is a full lesson on this in the Academy, with an interactive widget and a Hindi translation.
Related terms
Educational and analytical content only. OptionLab Pro is not a SEBI-registered investment adviser or research analyst and does not give buy or sell recommendations. Derivatives trading carries a high risk of loss.