Technical Definition
A two-candle expansion pattern where the second candle completely engulfs the entire range (high and low) of the previous candle, signaling sudden volatility expansion and a decisive shift in control.
The market moves from hesitation to aggression, volatility expands sharply, and one side takes decisive control.
Volatility explodes.
Market Psychology
Balance
Market may be consolidating or trending slowly Participation moderate Sides balanced
Battle
Both buyers and sellers push aggressively Stops on both sides triggered One side overpowers
Victor
Price closes decisively in one direction Indecision is over Control shifted decisively
Pattern Anatomy
First Candle (Reference)
Smaller range, represents balance or reduced momentum.
Second Candle (Outside Bar)
High > Prev High, Low < Prev Low, engulfs prior range.
Close Location
Determines directional bias (Bullish if near high, Bearish if near low).
Pattern Rules
Pattern consists of two candles
Comparison.
Second candle’s high > previous high
Expansion up.
Second candle’s low < previous low
Expansion down.
Entire range of first candle is engulfed
dominance.
Close location defines directional bias
Direction.
Signal Confirmation
- Follow-through in the direction of the close
- Price holding above/below the Outside Bar midpoint
- Alignment with higher timeframe trend
- Key market structure