The sandwich Candlestick pattern is a simple yet effective short-term trading signal that is widely popular among traders due to its easy identification and clear execution. The basic structure of this pattern consists of three Candlesticks, with two Candlesticks of the same direction surrounding one Candlestick of the opposite direction, forming a miniature reversal structure.

This pattern can be divided into two main types: bullish engulfing and bearish engulfing.

A bullish engulfing, also known as a bullish signal, typically appears at the end of a price pullback or near a support level. It is characterized by a rising candlestick sandwiched between two falling candlesticks. Traders usually buy when the price breaks above the high of the middle bullish candlestick, set the stop-loss below the lowest point of the three candlesticks, and set the profit target as the entry price plus the height difference between the three candlesticks.

In contrast, a bearish engulfing, which is a bearish signal, is commonly found near the end of a rebound or around resistance levels. It consists of two rising Candlesticks surrounding one falling Candlestick. The trading strategy is to sell when the price falls below the low point of the middle bearish Candlestick, with the stop-loss set above the highest point of the three Candlesticks, and the profit target set as the entry price minus the height difference between the three Candlesticks.

The core logic of trading in the sandwich Candlestick pattern lies in the fact that the middle reverse Candlestick is "engulfed" by the Candlesticks on both sides, indicating that the momentum of the original trend has been restored and that the short-term reverse movement cannot be sustained. This structure provides traders with a clear entry signal and a reference point for stop loss, significantly increasing the certainty of the trade.

It is worth noting that although the sandwich Candlestick pattern is highly valuable in technical analysis, traders still need to combine it with other technical indicators and market factors to ensure the comprehensiveness and accuracy of their trading decisions. At the same time, a reasonable risk management strategy is also crucial for using this trading signal, as it can effectively control potential losses.

In general, the sandwich Candlestick pattern provides short-term traders with a simple yet powerful tool to help them capture potential reversal opportunities in the market. However, like all technical analysis tools, it is not infallible and requires traders to continuously accumulate experience in practice to truly master its essence.