Three Candle Bullish Engulfing Strategy

30 thg 5

The Three Candle Bullish Engulfing Strategy is a versatile, multi-mode trading system designed for TradingView, combining classic candlestick patterns with momentum confirmation and dynamic risk management. This script supports both swing trading and intraday approaches, as well as an optional RSI-based breakout mode for additional signal filtering.

Key Features:

1. Three Candle Pattern Detection:
   
   The strategy identifies potential trend reversal points using a three-candle pattern:
   
   The first candle is a strong bullish (or bearish) move.
   
   The second candle is a doji or small-bodied candle, indicating indecision.
   
   The third candle is a bullish (or bearish) engulfing candle that closes above (or below) the previous high (or low), confirming the reversal.
   
   
2. Flexible Trading Modes:
   
   Swing Long Only: Enter long trades on bullish three-candle setups.
   
   Intraday Long & Short: Trade both long and short based on bullish and bearish three-candle patterns, with automatic session-end exits.
   
   RSI Breakout Mode: Enter long trades when the 1-hour RSI exceeds a user-defined threshold (default 80) and a bullish candle forms, with breakout confirmation and a fixed-percentage stop loss.
   
   
3. Visual Aids:
   
   Plots the RSI breakout trigger price and stop loss on the chart for easy monitoring.
   

How It Works:

1. Three Candle Pattern Entries:
   
   Long Entry: Triggered when a bullish candle is followed by a doji, then a bullish engulfing candle closes above the previous high.
   
   Short Entry (Intraday only): Triggered by the inverse pattern—bearish candle, doji, then bearish engulfing candle closing below the previous low.
   
   
2. RSI Breakout Entries:
   
   When the RSI on a higher timeframe (default 1 hour) exceeds the set threshold and a bullish candle forms, the script records a trigger price.
   
   A long trade is entered if the price breaks above this trigger, with a stop loss set a fixed percentage below.
   
   
3. Exits:
   
   Positions are closed if the trailing stop is hit, the session ends (for intraday mode), or the stop loss is triggered in RSI breakout mode.
   
   In RSI breakout mode, positions are also closed if a new breakout trigger forms while in position.
   

30 thg 5

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