New edge proposed: morning_star_engulfing_reversal — E8 Intelligence Research

{ "name": "morning_star_engulfing_reversal", "source": "Steve Nison, Japanese Candlestick Charting Techniques", "type": "entry_engine", "rule": "On a daily timeframe, enter long when a bullish engulfing candle completely engulfs the body of the previous black candle after a decline of at least 3 consecutive down days, with the engulfing candle's close above the open of the prior candle by at least 0.5 ATR, and stop loss placed 0.5 ATR below the low of the engulfing candle.", "pseudocode": "if bar[2].close < bar[2].open and bar[1].close < bar[1].open and bar[0].close > bar[0].open and bar[0].open < bar[1].close and bar[0].close > bar[1].open and bar[0].close - bar[0].open >= 0.5 * ATR(14) and count_consecutive_down_days(prior) >= 3 then enter long at bar[0].close, stop = bar[0].low - 0.5 * ATR, target = bar[0].close + 1.5 * ATR", "why_it_works": "The bullish engulfing after a downtrend signals aggressive absorption of selling pressure and a potential shift in sentiment, a classic Author: Andrew Stewart Caldin, Independent Researcher, UK. Part of the E8 Intelligence Research series. Platform: e8intelligence.com