Engulfing patterns are reversal candlestick patterns that can be bullish or bearish depending on whether they appear at the end of an uptrend or a downtrend. The Engulfing pattern is created with two candles. The body of the second candle "engulfs" the first. Traders can use engulfing patterns to enter the market ahead of a possible trend reversal.

In Forex trading, an engulfing pattern is a significant candlestick formation indicating potential trend reversals. There are two types: bullish engulfing and bearish engulfing.

A bullish engulfing pattern occurs at the end of a downtrend. It comprises a small bearish (red) candlestick followed by a larger bullish (green) candlestick. The bullish candlestick completely engulfs the previous bearish one, suggesting a potential shift to an uptrend.

Conversely, a bearish engulfing pattern appears at the end of an uptrend. It involves a small bullish (green) candlestick followed by a larger bearish (red) one. The bearish candlestick engulfs the previous bullish one, indicating a potential move toward a downtrend.

Traders use these patterns to identify entry and exit points, relying on them as indicators of market sentiment changes.