Types of Engulfing Candlestick in Option Trading

In this article, I will walk you through the types of Engulfing candles. Also, I will show the example of the engulfed candle in the chart pattern.

 

Table of Contens

 

What is an Engulfing Candle?

If the second candle entirely covers or engulfs the body of the first candle, in this case, it is called an engulfing candle. As we discussed the definition of engulf candle, let's dive into its types.

There are two types of engulfing candles,

• Bullish Engulfing Candle
 
• Bearish Engulfing Candle,

 

Difference Between Bullish and Bearish Engulfing

Let me walk you through in detail how it looks in the chart pattern and how you can identify both types of candles,

Bullish Engulfing Candle

The bullish engulfing candle is usually at the bottom, and the definition says that if the second body of the candle entirely engulfs the body of the first candle, it will be called a Bullish engulfing candle.

Let me show you the example of a bullish engulfing candle,

 

 

Usually, the bullish engulfing candle colour is green, which engulfs the first candle and shows the bullishness in the market.

Bearish Engulfing Candle,

The Bearish Engulfing candle is usually at the top, and the definition will be if the second larger candle completely engulfs the first candle, it is called the Bearish Candle.

 

 

Usually, the colour of the larger candle is red, which shows bearishness in the market.

Important Point:-

The concept will be similar, but it doesn't matter how many candles the larger candle engulfs. Let me show another example in which a larger candle engulfs 3 to 4 candles,

Note:- Always remember the concept. I have written above the definition of the engulfing candle.

 

Difference Between Mother & Baby vs Engulfing Candle,

The main difference is Engulf candles have two types, and Mother and Baby candles don't have any types, but both of these candles get formed at the same place, the Bullish on the bottom and the Bearish on the top.

I have written separate blog posts for the mother and baby candles, which I have explained in detail, so check them out.

 

What will be the time frame?

It depends upon the time you have spent on the market. The time frame that I use is 15 min, 1 hour, day, week and month, and even you can use 5 min time frame as well for trading,

Longer time gives us an idea about the trends or trend reversal.