New article: Price Action. Automating the Engulfing Pattern Trading Strategy

[MetaQuotes]

New article Price Action. Automating the Engulfing Pattern Trading Strategy has been published on mql5.com:

This article describes a process of creating an Expert Advisor for MetaTrader 4 based on the Engulfing pattern, as well as the pattern recognition principle, rules of setting pending orders and stop orders. The results of testing and optimization are provided for your information.

All Forex traders come across the Price Action at some point. This is not a mere chart analysis technique but the entire system for defining the possible future price movement direction. In this article, we will analyze the Engulfing pattern and create an Expert Advisor which will follow this pattern and make relevant trading decisions based on it.

We have previously examined the automated trading with Price Action patterns, namely the Inside Bar trading, in the article Price Action. Automating the Inside Bar Trading Strategy.

Rules of the Engulfing Pattern

The Engulfing pattern is when the body and shadows of a bar completely engulf the body and shadows of the previous bar. There are two types of patterns available:

• BUOVB — Bullish Outside Vertical Bar;
• BEOVB — Bearish Outside Vertical Bar.

Fig. 1. Types of pattern shown on the chart

Author: Dmitry Iglakov