Hey, I’m going to share something that has worked pretty well for me in trading.

It’s about the engulfing candle, a pattern that appears just when you least expect it and can change the direction of a trade.

Basically, the engulfing candle warns you that the trend is about to reverse.
Look, when you see a strong bearish candle and suddenly a bullish candle appears that completely covers it, that’s a sign that something is changing.
The same but reversed, of course.

Now, how to recognize it without getting confused.
You need to see that the new candle covers the entire previous one, from the full body to the wicks above and below.
It’s not a half-measure; it has to be total.
The engulfing candle must literally engulf the previous candle, that’s where the name comes from.

To enter the trade, you have two options:
Either enter as soon as you see the engulfing candle forming, or wait for it to retest the middle of the body and only then get in.
I prefer the second option; it gives you more confirmation.

Regarding the stop loss, don’t improvise here.
Take the wick of the engulfing candle, add one-third or half of the candle’s body, and place your protection there.
This way, you avoid getting stopped out during liquidity sweeps that cause so much damage.

In the end, the engulfing candle is just another tool in your arsenal, it’s not a cure-all.
Everyone interprets it according to their analysis and style.
But if you master it well, it opens up a lot of opportunities.
I hope this helps you improve your trades and that you keep studying these patterns.
There’s much more to learn in trading.