Worked example: engulfing bodies versus full candle ranges
Suppose one candle opens at 110 and closes at 106, followed by a candle opening at 105 and closing at 111. The second body, 105–111, contains the first body, 106–110, meeting the bullish body-engulfing condition discussed here. If the second candle instead opens at 107 and closes at 109, a high of 112 and low of 104 do not make its body engulf the first. This is a shape check; preceding movement, location and subsequent candles still matter. All values are hypothetical.
Read one candle: open, close, high and low
A candle body spans open to close; wicks reach the period's high and low. A daily candle represents one day; read other intervals according to chart settings.
Candle colors can be customized. Check the chart’s up and down colors before reading it.
Engulfing: compare the two bodies first
In a common bullish-engulfing definition, a rising body covers the preceding falling body; bearish engulfing reverses the direction. Compare open-to-close ranges, not just whether the second candle is longer.
After identifying the shape, check its position within an uptrend, downtrend or range and its proximity to support or resistance.
Long upper wick: a clue to a pullback from above
A long upper wick shows price reached higher levels but closed lower. Near prior highs, check for repeated resistance. If the candle is not closed, its wick may still change.
Long lower wick: a clue to recovery from below
A long lower wick shows price reached lower levels and recovered. Check proximity to prior lows or candidate support and whether subsequent candles break that low.
Compare the lower wick with the body and nearby candles, then watch for changes in subsequent highs and lows.
How to state confirmation and invalidation conditions
Record three things separately: visible shape, its location and later changes to check. For a bullish shape near support, watch whether later closes rise; a break below its low calls the support-reaction reading into question.
Does no AI pattern mean analysis failed?
Not necessarily. Insufficient information, incomplete shapes or unsupported locations can leave AIKTalk's layer blank. Read the reasoning and check the image; every chart need not have a pattern name.
References
Explore the original sources below to learn more. Our screenshot recognition and candidate selection follow additional implementation rules of our own.
- TradingView：Introduction to candlestick charts and patterns
References for candle bodies, wicks, color conventions and patterns.