[DarkTrader] 3 Candle EG Zone

9 Sep

The 3 Candle EG Zone indicator identifies engulfing patterns and plots dynamic boxes around these zones. The engulfing patterns are key reversal signals where one candle's body completely engulfs the body of the previous candle, indicating a shift in market sentiment. This indicator identifies both bullish and bearish engulfing patterns and draws visual boxes around them, which extend to the right on the chart to show how the zones evolve over time.

EG Calculation by moamenmostafa Script.

https://www.tradingview.com/v/o5HVYkcc/

Indicator In Use :



Customization Parameters :

• Max EG Box Showing: Defines the maximum number of engulfing (EG) boxes that can be displayed on the chart simultaneously. This helps to limit chart clutter by ensuring that only a specified number of zones are visible.
  
• Pivot EG Box Offset: Sets how far to extend the engulfing box to the right from the current candle. This makes the box continue into future price action, highlighting the significance of the engulfing zone.
  
• Zone Color: Customizes the color and transparency of the engulfing zone box, allowing users to set their preferred color to differentiate bullish and bearish zones.
  

Bullish Engulfing (Bullish EG):
The code checks if the last three candles have been bearish (open higher than close), and then the current candle is bullish (close higher than open) with a strong upward move. Additionally, the bullish candle must engulf the previous bearish candle, indicating a potential upward reversal. If this condition is true, a box is drawn around the low and high of the last candle.

Bearish Engulfing (Bearish EG):
Similarly, the code checks for three consecutive bullish candles (open lower than close), followed by a bearish candle (open higher than close) that engulfs the previous bullish candle. This signifies a possible downward reversal, and a box is drawn around the last candle's range.

The script continuously checks for bullish or bearish engulfing patterns and dynamically draws boxes around those zones. The boxes remain visible as long as the price stays within the engulfing zone's range. If the price exceeds the zone, the box is deleted, ensuring that only valid and current zones are shown on the chart.