Engulfing Candle Signals Filtered by Relative Body Size

Summary

This indicator marks bullish and bearish engulfing patterns using the bodies of two consecutive candles. A bullish signal requires a prior down candle followed by an up candle whose close reaches at least the prior open; the bearish rule mirrors those conditions. The current candle’s body must also be at least a configurable multiple of the prior body and exceed a minimum size threshold. Signals are plotted and can trigger alerts or long and short entries.

The document supplies parameter settings and source code, but no backtest configuration, trade statistics, or evidence that the pattern predicts profitable moves. The pattern uses candle body relationships; a commented shadow condition is not active. The pip-based minimum size may also need interpretation for the traded instrument and price scale. No exit, position sizing, or risk management method is described.

Key ideas

• The indicator defines bullish and bearish engulfing signals from opposite candle colors and body coverage.
• A signal must pass both a relative body-size filter and a minimum candle-size threshold.
• Signals can be plotted, sent as alerts, and used to initiate long or short positions.
• The document provides no performance evidence or exit and risk-management rules.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.