DAS Trader advanced hotkeys part 10

Simple watch-list scanner for candle engulfing pattern

Note, this post has been updated on 5th October 2024 and has some changes to the previous approach, so now it should be more effective and user-friendly.

I will try to explain the possibilities on a simple use case scenario.

Go through my watch list and find symbols that have formed an engulfing candle yesterday.

This will consist of multiple steps, so I will split it into sections.

First, we need to find the engulfing pattern. According to Investopedia

A bullish engulfing pattern is a candlestick pattern that forms when a small red candlestick is followed the next day by a large green candlestick, the body of which completely overlaps or engulfs the body of the previous day’s candlestick.

The bearish engulfing candle pattern is obviously the opposite of that - a red candle engulfing a previous green candle

The engulfing pattern finder

Here is the logic of the pattern finder we need to get into the DASTrader script.

For the simplicity I am not looking for the true engulfing as I do not get so many results that I could not skip them easily. A true engulfing should also start out of the previous day range, which I am not covering here, but it can be easily added as a new condition. I will focus only on the closing vs. opening previous day and the candle color difference.