An engulfing candle is a two-candle reversal pattern in which the body of the second candle completely covers the body of the first and closes in the opposite direction. A bullish engulfing has a down candle followed by an up candle whose body spans from below the first close to above the first open; a bearish engulfing is the mirror image at a high.
The pattern is read as a momentum shift: the side that controlled the first candle is overwhelmed on the second, and the larger the engulfing body relative to recent bars, the stronger the signal is held to be. It is most meaningful at the edge of a trend or against a level, where it can mark the moment control changes hands.
Definitions vary on detail — some require the wicks to be engulfed too, some only the bodies; some demand the engulfing candle close beyond a structural level. Secuora’s AI backtester includes an engulfing primitive among its deterministic building blocks, so a plain-English engulfing rule compiles to an exact, testable definition rather than a vibe.