Engulfing Candle Indicator with Single Alert

Engulfing Candle Indicator with Alerts

This custom Pine Script indicator identifies Bullish and Bearish Engulfing Candles on the price chart, which are key reversal patterns. A Bullish Engulfing occurs when a smaller bearish candle is completely engulfed by a subsequent bullish candle, signaling a potential upward trend. Conversely, a Bearish Engulfing happens when a bullish candle is engulfed by a following bearish candle, indicating a possible downward trend.

The indicator highlights these patterns on the chart with green arrows for Bullish Engulfing and red arrows for Bearish Engulfing. It also includes an alert system that notifies the user whenever either of these patterns occurs.

The script uses an Average True Range (ATR) filter to ensure that the engulfing candles have sufficient size relative to market volatility. Additionally, users can adjust the minimum engulfing size to fine-tune the signal.