Bullish and Bearish Engulfing and RSI, DMI and PSAR confirmation

2020년 5월 18일

The study combines Bearish and Bullish Engulfing pivot strategy with strong trend confirmative indicators:

• Directional Movement Index (DMI)
  
• Parabolic SAR
  
• RSI Bands
  

Engulfing patterns in market provide a useful way for traders to enter the market in anticipation of a possible reversal in the trend. Engulfing candles tend to signal a reversal of the current trend in the market. This specific pattern involves two candles with the latter candle "engulfing" the entire body of the candle before it. The engulfing candle can be bullish or bearish depending on where it forms in relation to the existing trend

The indicator can be applied to trading pairs with USD, USDT, ETH and BTC quote currencies. Indicator supports spot, futures and marginal trading exchanges. It calculates and compares values of the price action candles to define is there an engulfing and what type it is: bullish or bearish:

• If there is a bullish engulfing the indicator fills price action candle with yellow color
  
• If there is a bearish engulfing the indicator fills price action candle with purple color
  

Advantages of this indicator:
1. This indicator reveals presence of both types of engulfing simultaneously
2. Weak engulfment signals and market noises are filtered by RSI bands, DMI and PSAR confirmations. This allows to receive only strong and confirmed engulfments
3. This indicator includes both

• Study with built-in custom alerts to use with your own software through web hook connection.
  
• Strategy with configurable risk management settings (order size, commission, take profit, stop loss and trailing). This provides you opportunity of direct broker connection and allows to conduct backtests before applying the strategy to real account
  At the chart you can see the historical price action of XBTUSD at BitMEX exchange from 9th of May 2020 till 17th of May 2020 indicator. Moments when the indicator triggered to enter a position are described with message clouds. Moments when a certain position should be closed are highlighted with circles and commented with clouds
  

How to use?
Long signals:
1. Apply indicator to the trading pair your are interested in
2. Once bullish engulfing conditions are met price action candle will be colored yellow.
3. Once price action breaks RSI resistance band, retraces and closes below the band the signal is finished and the position should be closed

Short signals:
1. Apply indicator to the trading pair your are interested in
2. Once bearish engulfing conditions are met price action candle will be colored purple.
3. Once price action breaks RSI support band, retraces and closes above the band the signal is finished and the position should be closed

Automatic strategy:
When conditions of long or short position from the strategy are met the script opens position.

• Strategy.exit closes the position once risk management settings are met.
  
• Strategy.close closes the position once RSI band rejection is confirmed
  

If you want to obtain access to the indicator please send us a personal message

Best regards,
SkyRock Signals team

2020년 7월 5일

릴리즈 노트

This is an update to the indicator. Here is the list of changes:
1. Confirmative indicators have changed. Parabolic SAR was replaced by Volume indicator due to a lack of correlation and demand on volume adjustments. The indicator now uses:

• Directional Movement Index (DMI)
  
• RSI Bands
  
• Volume Oscillator
  

2. Engulfing pattern detections mechanism was remastered. It is now based on Simple Moving Averages and trend rules

3. Action bars now have labels besides colors.

• Bullish engulfing bar is now colored with yellow color and supplemented by blue "L" label which stands for Long
  
• Bearish engulfing bar is now colored with purple color and supplemented by red "S" label which stands for Short
  

Best to use with 1H timeframe. "How-to-use" instructions remain the same

Best regrads,
SkyRock Signals team

If you want to obtain access to the indicator please send us a personal message or leave a comment