Engulfing candles & inside bars
The two multi-candle setups worth knowing, momentum shifts and coiled springs.
The engulfing candle
An engulfing candle opens within the prior body and closes beyond its opposite extreme, the new candle's body swallows the old one. It means the losing side did not just stop the move; it reversed the entire prior period's work and closed with control. Everyone who traded the prior candle in the old direction is now underwater, and their exits fuel follow-through.
Strength checks: the bigger the engulfed body (not a doji), the closer the close to the extreme, and the heavier the volume versus recent candles, the more real the shift. At a structural level after an extended move, it is one of the cleanest reversal triggers there is.
Inside bars, the coil
An inside bar sits entirely within the prior candle's range: the market agreed to disagree and contracted. Contraction begets expansion, the break of the mother bar's range is the tradeable event, with the opposite side of the range as a natural stop. Multiple inside bars stacking (a coil) wind the spring tighter.