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. |