Bullish & Bearish Engulfing Pro

Hello Traders!

Overview
The Bullish & Bearish Engulfing Pro indicator is a powerful pattern recognition tool that identifies key reversal points and trend continuation opportunities. These engulfing patterns often mark the beginning of a significant price move and are widely used in technical analysis. For example, in an uptrend, a Bullish Engulfing pattern can provide an ideal pullback entry signal.

This indicator combines traditional candlestick theory with advanced technical filters like trend direction and volatility analysis to offer traders precise, high-confidence signals.



Key Features:

1. Accurate pattern detection:
   Uses refined algorithms to detect true Bullish and Bearish Engulfing patterns, filtering out noise and false positives.
   
2. Trend filter:
   Customizable Simple Moving Average (SMA) ensures trades are aligned with the market’s broader trend, improving trade success rates.
   
3. Volatility awareness:
   ATR-based filtering ensures that only statistically significant engulfing patterns are highlighted.
   
4. Visual clarity:
   Bullish and Bearish Engulfing patterns are displayed with distinct, customizable colors and labels for instant recognition.
   
5. Flexible customization:
   Users can adjust detection criteria, SMA settings, and visual options to suit their personal strategy.
   
6. Filtered signal display:
   Option to visualize filtered-out signals to better understand how the logic makes its decisions.
   

Bullish Engulfing Pattern

1. Appears after a downtrend or during a pullback in an uptrend
   
2. Consists of two candles
   
3. A smaller bearish candle
   
4. Followed by a larger bullish candle that completely engulfs the previous body
   

Bearish Engulfing Pattern

1. Appears after an uptrend or during a pullback in a downtrend
   
2. Consists of two candles
   
3. A smaller bullish candle
   
4. Followed by a larger bearish candle that completely engulfs the previous body
   

Key differences in this implementation

What makes this indicator unique

1. Trend and volatility filters
   Ensure patterns occur in meaningful market conditions
   
2. Comprehensive pattern analysis:
   Factors in candle body ratios, wick sizes, and relative size to past candles for smarter detection
   
3. Adaptive to market conditions:
   Dynamic thresholds based on ATR allow pattern recognition to adjust to different volatility regimes
   
4. Educational value:
   Visualizing rejected patterns helps traders build intuition and refine their discretion
   

How to Trade with this Indicator
Engulfing patterns can signal strong reversals or pullback continuations. Use them with trend and volume confirmation to maximize their effectiveness.
snapshot
Bullish Opportunities:
Look for Bullish Engulfing patterns (aqua-colored candles and labels) during or after a pullback in an uptrend.
Bearish Opportunities:
Watch for Bearish Engulfing patterns (orange-colored candles and labels) during or after a rally in a downtrend.

• Entry: Enter on the next bar open after the engulfing candle completes.
  
• Stop loss: 2 ticks below/above the engulfing candle’s low/high.
  
• Take profit: Aim for at least a 2R target, a swing high/low or manage the tradewith a trailing stop.
  

Trend Alignment:
For higher win probability, take trades only in the direction of the SMA-defined trend.

Note: To ensure the candle coloring appears correctly, place the indicator at the top of the object tree.