I was just reviewing some candlestick patterns that many traders still don't master well, and I wanted to share something that really works: the engulfing candle. It's one of those concepts that seems simple but completely changes how you read the market.

Basically, the engulfing candle is what you see when one candle completely covers the previous one, including high and low wicks. The key point is that it appears right when a trend is coming to an end. Imagine a strong downtrend, suddenly an bullish engulfing candle appears that tells you: hey, something is changing here. It's as if the market is turning around.

The interesting part is how to use it in your trades. When you see an engulfing candle forming, you have two options: you can enter immediately or wait for the price to test again the middle of that candle's body and then enter. I prefer the second option because it gives you more confirmation, less noise.

Now, the stop loss is where many fail. Most place the stop very tight, and then liquidity sweeps and liquidations happen. What works best is to take the full wick of your engulfing candle and add between one-third and half of the body. This way, you avoid false moves that liquidate positions.

Remember that the engulfing candle is a tool to confirm reversals or to look for entries, but it depends on how you combine it with your analysis. It’s not a golden rule; it’s just another piece of the puzzle. If you're building your strategy, this is definitely one worth mastering. Tell me if you've used it and what results you've had.