Engulfing means to coverup something entirely.
The high and low of the engulfment candle will be bigger than the engulfed candle.
Bullish Engulfing
At the end of a downtrend.
Bullish candle is a green candlelight .
The bullish candle will engulf the bearish candle.
Bearish Engulfing
At the end of an uptrend.
Bearish candle is a red candle.
The bearish candle will engulf the bullish candle.
2. Star Patterns
Involve 3 candles.
Morning Star
At the bottom of a downtrending market.
First candle should be bearish,
second candle should be a small candle either bullish or bearish.
Third candle should be bullish.
Confirmation only if third candle ie bullish candle touches or crosses the high of the first candle ie bearish candle.
Set stop loss below the middle candle.
After the pattern occurs the market goes up.
Evening star
At the top of an uptrending market.
First candle should be bullish,
second candle should be a small candle, either bullish or bearish,
third candle should be bearish.
Confirmation only if third candle is bearish candle touches or crosses the low of the first candle ie bullish candle.
Set stop loss above the middle candle.
After the pattern occurs the market goes down.