Algo Trading using Bearing and Bullish Engulfing Strategy
In this episode, we will be scripting a pattern recognition strategy to trade based on Bearing and Bullish Engulfing patterns.
Bearing and Bullish Engulfing strategy
I am not going to go into the details of whats bearish or bullish engulfing, we talked about it in multiple videos and sessions already. So if you have queries on the strategy , watch earlier videos. Also, there are various variations of this strategy based on candle formation and we are picking just one formation here. In simple terms, we will buy are sell when one candle enguls/covers another. With that note, lets jump into the script.
It is going to be a simple script, So, let’s jump right into it …
Rules
Buy :
We need to buy, If price forms a bullish engulfing candle
Short :
We need to short, If price forms a bearish engulfing candle
Simple., isn’t it?
Let’s jump to the script part
now
Buy :
We need to buy, If today’s open price is lower than yesterday’s closing price,
today’s low price is lower than yesterday’s low and today’s closing price is
greater than yesterday’s high. In simple terms, a bullish engulfing candle.
Short :
We need to short, If today’s open price is greater than yesterday’s closing
price, today’s high price is higher than yesterday’s high and today’s closing
price is lower than yesterday’s low. In simple terms, a bearish engulfing
candle.
/* Engulfing Candle (Bulish/Bearish) from market secrets*/
Buy=O<Ref(C,-1) AND L<Ref(L,-1) AND C>Ref(H,-1) ;
Sell=O>Ref(C,-1) AND
H>Ref(H,-1) AND C<Ref(L,-1);
That’s all. Simple, isn’t it?
And let’s move to backtesting. We can run backtest of this strategy in multiple
TFs to check the results (use 15 min TF, long.
50% with 18% drawdown)
Check Out Script Library to get script used for this episode:
https://marketsecrets.in/script-library/
To know more, checkout:
