Evaluating engulfing reversals with opposite-exit tests

Count the leaving close first

The archive used a reversal count only when price entered a candlestick pattern from one direction and left it in the opposite direction. The leaving trend was an opposite-side exit: a close beyond the pattern highest high or lowest low.

A delayed turn, or a one-tick turn that failed immediately, did not qualify. The close had to leave the whole pattern, not merely tick through one edge and fail.

Keep types above the median

The evaluation compared 103 candlestick types. A search of more than 4.7 million candles across hundreds of stocks in both bull and bear markets found only nine examples of one highly ranked but extremely rare reversal type.

A median frequency filter kept only patterns that appeared more often than the median of those 103 types, which removed rare formations from the ranking. Among the 103 types, bearish engulfing received a frequency rank of 11, where 1 marked the most frequent rank on that scale.

What the common set still ranked

After that screen, the two-bar bearish engulfing pattern had the strongest bull-market reversal standing among the remaining common candles, ahead of three outside up and the bullish belt hold.

Bearish engulfing was read after an advance as a white body fully spanned by a following black body that opened above the prior close and closed below the prior open. Shadows were ignored and tied body edges were allowed.

Three outside up was a bullish engulfing pair in a decline plus a third candle with a higher close, used as confirmation of the engulfing turn. The bullish belt hold is a white opening-marubozu bar in a decline: an upper shadow is present and a lower shadow is absent.

Use height as a separate check

Pattern-height projection measured the distance from a pattern highest high to lowest low. That height was a separate short-horizon check toward the next swing high or swing low, not a substitute for the reversal count or the frequency filter.