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Candlestick Engulfment & Reversal Indicators

 

The Alchemy Candlestick Engulfment and Reversal Indicators consist of three separate indicators, each designed to identify potential turning points or reversals in the market. One of the most important aspects of predicting future market prices is the action of the market price itself. Current price action is represented by the chart formations it creates. The Alchemy Candlestick Engulfment and Reversal Indicators were designed to assist you in finding these chart formations which usually lead to turning points in the market. The formations spotted by these indicators are classic to all charting techniques, but the ones presented here are particularly important to short-term trading and daytrading.

The Alchemy Candlestick Engulfment and Reversal Indicators incorporate alert features and a user-defined input that allows you to determine and qualify the possible engulfment and reversal patterns over a pre-set period of time. This feature filters out the noise of insignificant market action and identifies only the strongest engulfment and reversal patterns occurring at or near new highs and new lows. The Alchemy Candlestick Engulfment and Reversal Indicators can be combined with other indicators such as stochastics, divergence, or the support and resistance pivot points indicators to help confirm strong turning point signals in the market.

The Alchemy Candlestick Engulfment and Reversal Indicators include:

Bullish or Bearish Candlestick Engulfment

This indicator gives an alert and displays a text label on your chart when either a bullish or bearish engulfment pattern is identified. A user-defined input gives you the flexibility to determine either bullish or bearish engulfments occurring at the lowest low or highest high over a pre-set number of price bars. This allows you to identify engulfments occurring at potential tops or bottoms.

A bullish engulfing pattern occurs when, during a downtrend, a price bar engulfs the previous price bar. In other words, the current bar’s open is lower than the previous bar’s close (the bar opens down), and it’s close is higher than the previous bar’s open (the bar closed up significantly). Bullish engulfing patterns generally indicate a trend reversal up and the beginning of an uptrend.

A bearish engulfing pattern occurs when, during an uptrend, a price bar engulfs the previous bar, in other words, the bar’s open is higher than the previous bar’s close (the bar opens up), and it’s close is lower than the previous bar’s open (the bar closed down significantly). Bearish engulfing patterns generally indicate a trend reversal and the beginning of a downtrend.

Bullish and Bearish Reversal Bar

This indicator gives an alert and displays a text label on your chart when either a Bullish or Bearish Reversal Bar occurs with current price action. A user-defined input gives you the flexibility to determine bullish or bearish reversal patterns at a lower low or higher high. This allows you to identify reversal patterns at potential tops or bottoms.

A bullish reversal bar occurs when price makes a lower low and a lower high than the previous bar and also closes above the open of the current bar and in the upper quarter of the current bar. A bullish reversal bar indicates a potential reversal to the upside.

A bearish reversal bar occurs when price makes a higher high and a higher low than the previous bar and closes below the open of the current bar and in the lower quarter of the current bar. A bearish reversal bar indicates a potential reversal to the downside.

Double Bottom - Double Top

The Double Bottom – Double Top Indicator alerts you and displays a text label when a double bottom or a double top is formed. The indicator will give an alert and display text on your chart when a double bottom or double top pattern is identified.

A double bottom is formed when the low of the current bar is equal to the low of the previous bar and the current bar closes near its high. A double bottom can be an uptrend reversal signal or can confirm the end of the retracement countertrend down move in an uptrending market.

A double top is formed when the high of the current bar is equal to the high of the previous bar and the current bar closes near its low. A double top can be a downtrend reversal signal or can confirm the end of the retracement countertrend up move in a downtrending market.

View Charts : Engulfment & Reversal
 

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Gap

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MACD Signal Line-%Ds Hook

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Overbought/Oversold

Rolling Floor Traders Pivot Points

Strong Trend

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Read More About

Bar Pattern Analysis

Breakout

Divergence

Engulfment & Reversal

Fibonacci Retracements

Floor Traders Mid Points

Floor Traders Pivot Points

Gap

High Low Mid Points

Intraday Time Zones

MACD Signal Line-%Ds Hook

Multiple Moving Averages Crossover

Open/High/Low/Close

Overbought/Oversold

Rolling Floor Traders Pivot Points

Strong Trend

Support & Resistance Pivot Points

Trailing Stop

Trend Catcher

 

     
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IMPORTANT INFORMATION:
Government regulations require disclosure of the fact that past performance, whether actual or indicated by historical tests of strategies or indicator methods, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options futures or forex); therefore, you should not invest or risk money that you cannot afford to lose. Any advisory or signal generated by Trading Alchemy indicators or strategies is provided for educational purposes only and any trades placed upon reliance on Trading Alchemy indicators or strategies are taken at your own risk for your own account. Consult your broker or advisor prior to making any investment decisions. The information made available on this Website is not an offer to buy or sell securities, securities derivative, futures products or off-exchange foreign currency (forex) transactions of any kind.  All proprietary technology of Trading Alchemy indicators and strategies is owned by Alchemy Trading Technologies, Inc.

 

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