Engulfing with Fibonacci Levels

19 thg 6

Indicator Explanation

The indicator identifies bullish and bearish engulfing patterns and plots Fibonacci levels based on these patterns. Here's a detailed explanation of the script:

1. Bullish Engulfing Pattern

A bullish engulfing pattern is identified when:
- The previous candle is bearish (`close[1] < open[1]`).
- The current candle is bullish (`close > open`).
- The low of the current candle is lower than the low of the previous candle (`low < low[1]`).
- The current candle's close is higher than the previous candle's open (`close > open[1]`).

When a bullish engulfing pattern is identified:
- Fibonacci levels are plotted from the low (0%) to the high (100%) of the bullish candle.
- A green dot is plotted below the bullish candle to indicate a buy signal.

2. Bearish Engulfing Pattern

A bearish engulfing pattern is identified when:
- The previous candle is bullish (`close[1] > open[1]`).
- The current candle is bearish (`close < open`).
- The high of the current candle is higher than the high of the previous candle (`high > high[1]`).
- The current candle's close is lower than the previous candle's open (`close < open[1]`).

When a bearish engulfing pattern is identified:
- Fibonacci levels are plotted from the high (0%) to the low (100%) of the bearish candle.
- A red dot is plotted above the bearish candle to indicate a sell signal.

3. Plotting Fibonacci Levels

For both bullish and bearish patterns, Fibonacci levels are plotted at:
- 0% (high for bullish, low for bearish)
- 50%
- 61.8%
- 79%
- 100% (low for bullish, high for bearish)

Smart Money Concept (SMC) Explanation

Bearish Signal

In the context of Smart Money Concepts (SMC), a bearish engulfing pattern can indicate:
- **Buy Side Liquidity Grab**: The high of the current bearish candle goes above the high of the previous bullish candle, potentially grabbing buy-side liquidity (stop losses of short positions or buy stops).
- **Break of Structure (BoS)**: The close of the bearish candle below the open of the previous bullish candle indicates a shift in market structure.

After identifying this bearish engulfing pattern, a smart money trader might:
1. Wait for the market to retrace 50% of the bearish candle.
2. Enter a sell trade around the 50% retracement level, anticipating a continuation of the downward move.

#### Bullish Signal

Similarly, a bullish engulfing pattern can indicate:
- **Sell Side Liquidity Grab**: The low of the current bullish candle goes below the low of the previous bearish candle, potentially grabbing sell-side liquidity (stop losses of long positions or sell stops).
- **Break of Structure (BoS)**: The close of the bullish candle above the open of the previous bearish candle indicates a shift in market structure.

After identifying this bullish engulfing pattern, a smart money trader might:
1. Wait for the market to retrace 50% of the bullish candle.
2. Enter a buy trade around the 50% retracement level, anticipating a continuation of the upward move.



The indicator helps traders identify key engulfing patterns that align with smart money concepts of liquidity grabs and breaks of structure. By plotting Fibonacci levels, it visually aids traders in waiting for optimal retracement levels (50%) to enter trades in the direction of the anticipated move. This approach leverages the idea that significant market participants often seek liquidity and cause structural shifts, providing entry opportunities for informed traders.

23 thg 8

Phát hành các Ghi chú

Customizable Engulfing Strategy Indicator with EMA and Killzones

This indicator is designed for traders who want to identify high-probability trade setups using the engulfing candle pattern in conjunction with the 50-period Exponential Moving Average (EMA) and time-specific "killzones." It provides visual buy and sell signals while displaying customizable stop loss and take profit levels on the chart.

Key Features:
- Engulfing Candle Patterns**: The indicator identifies bullish and bearish engulfing patterns, signaling potential reversals or continuations in price trends.
- A **bullish engulfing** signal indicates a potential upward trend.
- A **bearish engulfing** signal indicates a potential downward trend.

- **50 EMA Trend Filter**: Trades are filtered based on the direction of the 50-period EMA to ensure alignment with the overall market trend. Only buy signals are provided when the EMA is trending up, and only sell signals are given when the EMA is trending down.

- Killzones: Users can limit signals to specific market sessions known as "killzones" where liquidity and volatility are typically higher. The default killzones include:
- **Asian Session** (8 PM to 12 AM EST)
- **London Session** (2 AM to 5 AM EST)
- **New York AM Session** (9:30 AM to 11 AM EST)
- **New York PM Session** (1:30 PM to 4 PM EST)
Signals will only be shown during these selected timeframes, keeping the chart clean and focused.

- Customizable Risk Management:
- **Stop Loss**: The indicator automatically calculates stop loss levels based on a customizable multiplier of the engulfing candle’s range.
- **Take Profit**: Take profit levels are calculated as a multiple of the stop loss distance, allowing users to set up to 6 take profit targets.
- Users can adjust both stop loss and take profit levels according to their trading preferences.

- **Historical Lines**: The indicator allows users to set how many past stop loss and take profit levels they want to see on the chart, helping with backtesting and understanding trade setups without cluttering the chart.

How to Use:
1. **Trend Confirmation**: Check the 50 EMA to determine the trend direction. Only follow buy signals in an uptrend and sell signals in a downtrend.
2. **Killzone Session Filtering**: Ensure that signals are aligned with the selected killzone periods, allowing trades to occur during periods of heightened activity.
3. **Risk Management**: Customize your stop loss and take profit multipliers to fit your risk profile. Adjust the number of historical lines for a cleaner chart experience.
4. **Backtesting and Optimization**: Use the customizable features, including risk and time filters, to optimize the indicator for your trading style.

This indicator is perfect for traders who prefer trading with market structure patterns, while ensuring that entries are supported by strong technical filters. It helps remove the noise from non-ideal trading conditions and focuses on high-probability trades during peak market activity.