The Engulfing Candlestick Chart Pattern MT4 forex indicator displays the well-known Engulfing reversal chart pattern on the Metatrader 4 chart.
There are two types of Engulfing chart patterns:
Bullish Engulfing chart pattern: A small bearish candlestick followed by a large bullish candlestick.
Bearish Engulfing chart pattern: A small bullish candlestick followed by a large bearish candlestick.
As you can guess from the information above, a Engulfing candlestick chart pattern is considered a reversal trading pattern.
In forex, it can be used to trade trend continuation as well as trend reversals.
The Engulfing Candlestick Chart Pattern MT4 paints blue and red arrows on the chart:
- A blue arrow represents a Bullish Engulfing chart pattern. Traders look for buy trade opportunities.
- A red arrow represents a Bearish Engulfing chart pattern. Traders look for sell trade opportunities.
Always confirm the signal with trend following indicators or with price action analysis tools.
The EUR/USD 1-Hour chart below displays the Engulfing Candlestick Chart Pattern Metatrader 4 Forex indicator in action.
Basic Trading Signals
Signals from the Engulfing Candlestick Chart Pattern MT4 forex indicator are easy to interpret and goes as follows:
Buy Signal: Go long when the indicator draws a blue arrow on the MT4 chart. Confirm the buy trade with other technical indicators or with price action.
Sell Signal: Go short when the indicator draws a red arrow on the MT4 chart. Confirm the sell trade with other technical indicators or with price action.
Trade Exit : Use your own method of trade exit.
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: Chart pattern indicator
Customization options: Variable (alertsON, draw candle) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Copy and paste the engulfing-indicator.mq4 into the MQL4 indicators folder of the Metatrader 4 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL4 > Indicators (paste here)