Engulfing and Star Candle Patterns with Breakout Entries and Risk Controls
Summary
This strategy identifies bullish and bearish engulfing candles and morning and evening stars using configurable body-size, engulfment, and penetration rules. It arms a trade when price breaks the relevant pattern extreme: the high for bullish setups or the low for bearish setups. Stops are placed beyond the pattern, with optional buffers, and targets use risk multiples. The strategy can take partial profits at a first target and move the remaining stop to break-even; pending entries can expire or be canceled under selected conditions.
Additional controls include trade and loss limits per day, optional session and EMA filters, long or short permissions, and either fixed-lot or risk-based sizing. The script exposes alerts and dashboard counters for signals, orders, fills, cancellations, and blocked setups. Although it includes commission and slippage settings for strategy simulation, the supplied text reports no performance results. Outcomes will depend on instrument, timeframe, execution assumptions, and parameter choices, so the pattern rules and risk controls are a testable framework rather than evidence of an edge.
Key ideas
- Engulfing and three-candle star patterns define candidate reversal setups.
- Entries trigger on breaks of pattern highs or lows, with configurable order handling.
- Stops use pattern extremes and targets are set as multiples of initial risk.
- Partial exits, break-even adjustment, daily limits, and optional filters manage trades.
- The document provides strategy mechanics but no evidence of profitability.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.