Engulfing

 

Description

Engulfing is a trend reversal candlestick pattern consisting of two candles. Depending on their heights and collocation, a bullish or a bearish trend reversal can be predicted.

The bearish Engulfing reversal is recognized if:

  • The first candle is bullish and continues the uptrend;

  • The second candle is bearish and its Open price is higher than the first candle's Close price;

  • The second candle's Close price is lower than the Open price of the first candle.

The bullish Engulfing reversal is recognized if:

  • The first candle is bearish and continues the downtrend;

  • The second candle is bullish and its Open price is lower than the first candle's Close price;

  • The second candle's Close price is higher than the Open price of the first candle.

Input Parameters

Parameter Description
length The number of candles used to calculate the average body height. If the body height of a candle exceeds this average, it is considered long.
trend setup The number of preceding candles to check if the trend exists.

Plots

Plot Description
Bearish The bearish Engulfing candlestick pattern.
Bullish The bullish Engulfing candlestick pattern.


For educational purposes only. Not a recommendation of a specific security or investment strategy.
Technical analysis is not recommended as a sole means of investment research.
Past performance of a security or strategy does not guarantee future results or success.