A bullish engulfing bar opens below the previous close and closes above the previous open, fully engulfing the prior bar's real body. Bearish engulfing is the mirror. This indicator surfaces both as booleans on each bar.
Logic
bullish_engulfing[t] =
close[t] > open[t-1]
AND open[t] < close[t-1]
AND close[t-1] < open[t-1] (prior bar bearish)
AND close[t] > open[t] (current bar bullish)
bearish_engulfing[t] = mirrorParams
None.
Output
Three columns:
{name}_bullish- bullish engulfing detected{name}_bearish- bearish engulfing detected{name}_signal- +1 for bullish, -1 for bearish, 0 otherwise
Usage
Engulfing bars are commonly used as reversal triggers at structure levels. Combine with a zone, support/resistance, or trend filter - on their own they're unreliable.
Pitfalls
- Engulfing is just a body comparison. Long-wick bars can satisfy the pattern without meaningful order flow behind them.
- More common on lower timeframes = more noise. The signal is most useful on 1h+ bars.