Engulf candle and breakouts

[Tive]

I've heard people say "watch for an engulf candle before a breakout" but I'm not sure how that works in practice. Is it just about momentum confirmation or is there more to it?

[Liabi]

Good question. When traders talk about an engulf candle before a breakout, they usually mean that the market gave a strong signal of momentum shift. For instance, if price consolidates near resistance and then prints a bullish engulfing that breaks the last few candles' highs, that can indicate buyers stepping in early. I often see this on 30M and 1H charts — especially after failed breakdowns. It's a nice clue that price might finally punch through the level. It's not a guarantee, of course, but it adds conviction when paired with rising volume and a clean structure.

[Tive]

That's actually really helpful. I didn't realize it was more about the setup than the candle itself. I'll try to spot those failed breaks next time. Thanks a lot!