Engulfing Strategy EA Specification
This document outlines the design specifications for a multi-timeframe Engulfing Strategy EA that supports automatic trading, manual signal alerts, and account flipping logic.
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1. TRADE STRUCTURE
A. Trading Bias (Setup)
Swing Trading Setup:
Setup Timeframe: Weekly
Trade Control: Daily
Confirmation: H4 / H1 / M30
Day Trading Setup:
Setup Timeframe: H4
Trade Control: M30
Confirmation: M15 / M5 / M1
> User can select which setup to respect: Weekly only, Daily only, or both.
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2. CORE STRATEGY RULES
A. Entry Rules
1. Engulfing Zone (EG) is formed on setup timeframe.
2. Price pulls back into the Engulfing zone.
3. Engulfing Candle forms on the Trade Control timeframe.
4. Confirmation Entry occurs on selected lower timeframe (M30, M15, M5, etc.).
5. Confirmation Rule:
Entry timeframe (e.g., M5/M15) must confirm both:
✅ An Engulfing Candle (EG)
✅ An Engulfing Fail (EF)
✅ A Pullback into that EG/EF zone
Only when all 3 conditions are met, a trade entry is valid.
6. Every new EG zone needs a new confirmation chain (e.g., new H4 EG needs new M30 and M5 confirmations).
B. Re-entry Logic
If price continues to form new EGs in the direction of the bias, continue entering new trades.
If price reaches an opposite zone (e.g., sell trade reaches H4 buy zone), check for reversal EG on H1 or M30 before stopping or reversing.
If an EG in the same trade direction forms instead, continue trade to next H4 zone.
If no valid confirmation forms, hold the trade.
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3. TRADING MODES
A. Signal Only (Manual Trading)
Alerts user when two of the three conditions are met for preparation.
Full signal alert when pullback and EG candle form in the zone.
Highlight zone and price on chart.
B. Auto Trading (EA Mode)
Automatically executes trades once full confirmation is met.
Applies risk settings and lot sizing.
Supports re-entry and continuation logic.
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4. LOT SIZE AND RISK SETTINGS
A. Initial Lot Size Calculation:
UseRiskLot: true/false
RiskPercent: (e.g., 1%)
StopLossPips: (e.g., 30)
AccountReference: "Balance" or "Equity"
Formula:
InitialLot = (AccountReference * RiskPercent / 100) / (StopLossPips * PipValuePerLot)
B. Flipping Logic (Lot Multiplier):
LotMultiplier: e.g., 2
MaxLotSize: e.g., 0.64
Progression:
0.01 > 0.02 > 0.04 > 0.08...
If limit (e.g., 0.64) reached, reset to 0.01
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5. RISK MANAGEMENT
Account SL/TP Settings:
Take Profit: in cash or %
Stop Loss: in cash or %
Max Trades Per Day
Session Filter:
Days and Time to trade (customizable)
Spread and Slippage Filters:
MaxAllowedSpread
MaxSlippage
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6. STOP LOSS OPTIONS
User-selectable SL methods:
1. Fixed SL (Pips)
2. Risk-Based SL (Cash / %)
3. Zone-Based SL:
SL placed just below (Buy) or above (Sell) the engulfing zone
Optional buffer in pips (e.g., 5 pips)
4. Zone + ATR-Based SL:
SL = zone boundary ± (ATR × multiplier)
ATR period and multiplier user-defined
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7. ZONE AND CHART CLEANUP
Only show EG/EF zones around Current Market Price (CMP) to avoid clutter.
Automatically remove invalid or broken zones.
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8. ALERT SYSTEM
Alert when:
Setup zone forms (e.g., Weekly or H4 EG)
Pullback happens into trade control zone
Confirmation EG/EF form together on entry timeframe
Alerts delivered via:
On-screen popup
Email
Mobile push
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9. TARGET MANAGEMENT
Inputs:
DailyProfitTargetAmount
DailyProfitTargetPercent
DailyLossLimitAmount
DailyLossLimitPercent
AccountProfitTargetAmount
AccountLossLimitAmount
ActionAfterTargetHit: ["Continue", "Pause", "ExitEA"]
NewTradingDayStartTime
Behavior:
If target hit → take action based on selected option
Sends alert with summary when any target is hit
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This EA allows for flexible and dynamic trading using an Engulfing-based price action model that scales across day trading and swing trading. The EA is designed to capture continuation and reversal moves efficiently with minimal chart noise and robust risk management.
✅ The updated EA specification now includes your latest requirement: EG + EF + Pullback as mandatory trade confirmation on the entry timeframe.
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