A bullish engulfing candle followed by a third candle closing higher still, confirming the reversal with follow-through.
Sequence: a red candle, a bullish-engulfing green candle, then a further green close above the engulfing candle's high.
As with three-inside-up, the value is the confirmation. An engulfing candle that is immediately rejected means little; one that is followed by continuation is a real transfer of control.
Statistically, adding a confirmation candle raises the proportion of patterns that continue but reduces the number of opportunities and worsens entry price. That trade-off is the central tension of all candlestick trading, and there is no setting that removes it. Decide which side of it your strategy needs and apply it consistently rather than case by case.
Original diagrams for the ideas on this page. Illustrative, not real market data.
The parts of a candlestick. One candle sums up a slice of time: the thick real body runs from the opening price to the closing price, and the thin wicks reach out to the highest and lowest prices traded. Colour tells you which way the body ran.
Educational only, not advice. Spotted an error? Post in Site Feedback.