Engulfing Overlap Zone by RWBTradeLab
- Indicators
-
Md Hasibul Kabir
Founder & Developer at RWBTradeLab.
I develop high-quality trading indicators, expert advisors (EAs),
and utility tools for MetaTrader 5.
My work focuses on precise calculations, non-repainting logic,
and clear visual market structure. - Version: 1.10
- Updated: 2 September 2026
Engulfing Overlap Zone by RWBTradeLab
A clean, non-repainting engulfing OVERLAP detector for MetaTrader 5 — the most selective member of the RWBTradeLab engulfing family. It finds the rare, high-interest moment when a FAILED engulfing zone is overlapped by a CONFIRMED opposite engulfing zone: trapped traders on one side, fresh confirmed pressure on the other, both at the same price area. Every overlap is sorted into 8 types and graded by how much price the two zones actually share. All from CLOSED candles only.
What This Indicator Does
The indicator runs a 3-step detection chain:
Step 1 — Engulfing Detection (internal engine)
Confirmed engulfing patterns by CLOSE (wicks alone don't count):
- Regular Engulfing (2 candles): the very next candle closes beyond the base candle's high/low
- E-Regular Engulfing (multi-candle): a run of same-color candles after the base (Dojis skipped, an opposite candle cancels); the engulfing close happens on the 2nd or later candle
- A Regular pattern on the same base takes precedence over E-Regular
- Type 1: the pattern also raided the OPPOSITE side of the base candle before the close broke it — a liquidity sweep. On a Regular pattern this is tested on the confirming candle; on an E-Regular pattern any candle of the run may carry it
Step 2 — Failure Detection
- A confirmed Buy Engulfing FAILS when a later Red candle CLOSES below the base low
- A confirmed Sell Engulfing FAILS when a later Green candle CLOSES above the base high
Step 3 — Overlap Detection (the actual signal)
The indicator then looks for a CONFIRMED opposite engulfing whose confirmation landed ON the failure candle or as close BEFORE it as possible, and whose base zone OVERLAPS or touches the failed zone — in both time and price. When several candidates exist, the one confirmed closest to the failure wins, because that is the moment control changes hands.
- Buy EG Overlap: a failed SELL engulfing overlapped by a confirmed BUY engulfing zone
- Sell EG Overlap: a failed BUY engulfing overlapped by a confirmed SELL engulfing zone
Each overlap is named after the OVERLAP pattern, because that is the zone drawn and the side taking control — so the 8 types are R Buy, R Sell, ER Buy, ER Sell, T1 R Buy, T1 R Sell, T1 ER Buy and T1 ER Sell Overlap.
Overlap Strength
Strength is the share of the Overlap zone that sits inside the failed zone's price range. 100% means the two zones sit on exactly the same prices; a small number means they barely touch. Strength is shown on every label and can be used as a filter — set a Minimum Overlap Strength and only the tighter confluences are kept, on the chart, in the panel and in the alerts alike.
Key Features
Professional Chart Display
- Only the OVERLAP zone is drawn, so the chart stays clean: the overlap pattern's base candle range, running to its confirmation candle
- The zone is filled in TWO TONES — the price slice it shares with the failed zone in the direction colour, and whatever is left over in a neutral tone, so the confluence is visible at a glance
- The zone outline tells you the type: solid = Regular, dashed = E-Regular, thick = Type 1
- Type 1 zones are filled a step brighter than plain zones (adjustable)
- Boxes are drawn BEHIND the candles — price action always stays readable
- One clear label per zone ("R Buy EG Overlap 68%", "T1 ER Sell EG Overlap 100%", ...) with the strength percentage optional
- Label distance scales with the zone height (percentage based)
Summary Panel
- A compact panel in the chart corner lists all 8 types with how many of each are currently on the scanned range
- Every cell is drawn as its own filled box with a thin grid line, so it reads the same on a white chart and on a black one
- The panel counts a type even while that type is hidden, so it tells you what is really there and not just what is drawn
- Four corner positions, adjustable font size and colours, and it can be switched off entirely
Non-Repainting Engine
- All patterns, failures and overlaps are calculated on CLOSED candles only
- Zones are rescanned once per new bar, not on every tick — with an internal detection cache for zero terminal lag
- Automatic object cleanup — remove the indicator and the chart is spotless
Chart = Alerts, Always
- Drawing and alerts share ONE detection pass over the same rules
- An alert fires exactly when the overlap is completed (the opposite pattern's confirmation candle closes) — once per event, never repeated
- Whatever fires an alert is exactly what you see on the chart
Alerts (bar-close only, off by default)
- 8 alert types, one per overlap type, each with its own On/Off switch
- 3 delivery channels: Popup, Push Notification, Email
- Every alert message includes event, price, symbol, timeframe and time
Inputs
- Scan: Scan Length (closed candles, default 50) and Minimum Overlap Strength (%)
- Pattern Types: an On/Off switch for each of the 8 overlap types
- Zone Style: shared-area and remaining-area colours for Buy and Sell, label colours, Type 1 extra emphasis
- Labels: show labels, show strength % in label, text offset from box (% of zone height, min 20), font and font size
- Summary Table: show/hide, corner, font size, text colour, header background, cell background, grid colour
- Alerts: master switch, Popup / Push / Email, and a switch per overlap type
How to Use
Attach the indicator to any symbol and any timeframe — forex, gold, indices, crypto. A Buy EG Overlap marks a price area where a bearish attempt failed AND a bullish engulfing was confirmed on top of it — double evidence in one zone, watch it as a high-interest demand area. A Sell EG Overlap is the mirror supply area. Read the two tones to see how much of the zone is genuine confluence, and raise Minimum Overlap Strength when you only want the tightest ones. This indicator completes the RWBTradeLab engulfing family: the Engulfing Detector shows the pattern, the Failed Zone shows its fate, and the Overlap Zone shows where both stories collide. For best results combine with higher-timeframe structure and your own trade plan.
Important Notes
- The scan is heavier than a plain pattern scan, so the default range is kept deliberately short
- Push notifications require your MetaQuotes ID in MT5 (Tools -> Options -> Notifications); email alerts require SMTP settings
- Alerts work while the terminal is running
- Default colours are tuned for dark charts — all colours are fully adjustable for light themes
- This indicator is a pattern-analysis tool, not financial advice. Trading involves risk — always use proper risk management
Creator: RWBTradeLab
If you find this indicator useful, please leave a review and share your feedback.
