Engulfing Candle Pattern

Indicator Overview

This indicator identifies Bullish and Bearish Engulfing candlestick patterns on a price chart. These patterns are reversal signals:

Bullish Engulfing: Occurs during a downtrend, where a bullish candle fully engulfs the body of the previous bearish candle.

Bearish Engulfing: Occurs during an uptrend, where a bearish candle fully engulfs the body of the previous bullish candle.

Key Features

1. Pattern Detection:

Detects Bullish Engulfing and Bearish Engulfing patterns based on candle body comparisons.

Uses the current and previous candle's open/close prices to determine engulfing conditions.

2. Visualization:

• Plots labels on the chart:
  

"Bullish Engulfing" below the candle for bullish patterns.
"Bearish Engulfing" above the candle for bearish patterns.

3. Alerts:
Triggers alerts when either pattern is detected, allowing traders to take action.

How It Works

Bullish Engulfing Condition:
Current candle is bullish (close > open).
Previous candle is bearish (close < open).
Current candle's body fully engulfs the previous candle's body.

Bearish Engulfing Condition:
- Current candle is bearish (close < open).
- Previous candle is bullish (close > open).
- Current candle's body fully engulfs the previous candle's body.

Usage

- Apply the script to any chart in TradingView.
- Look for "Bullish Engulfing" or "Bearish Engulfing" labels on the chart.
- Set up alerts to get notified when these patterns form.

This indicator is a simple yet effective tool for identifying potential trend reversals using engulfing candlestick patterns.