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The Enhanced Bullish Engulfing Pattern Detection Algorithm

Updated: Nov 22, 2022

The bullish engulfing pattern is identified on our platform as bullish_engulfing. Investopedia describes the pattern as a "two-candle reversal pattern".

The pattern occurs when a previous downward 'Red' candle is immediately followed by an upwards 'Green' candle. The body of the Green candle must be larger than the previous Red candle.

For our detection algorithm, we've added an additional condition ensuring that the 'close' price of the Red candle is below the 20 EMA (Exponential Moving Average).

Here's an image demonstrating what this looks like:

Picture of a stock market candlestick with the bullish engulfing candle circled.
Bullish Engulfing Pattern. Part of article "The Modified Bullish Engulfing Pattern" from Creative Appnologies.

Our platform provides the Bullish Engulfing Pattern detection for all supported timeframes.

To check out examples of the pattern in action, check out our free signals Discord.

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