Bollinger Bands with Engulfing Strategy
By Samantha Baltodano
What Are Bollinger Bands with Engulfing?
Bollinger Bands with Engulfing is a strategy developed by Pawel Kosinski. It includes:
- finding an occurrence of the bullish Engulfing candlestick pattern within Bollinger Bands
- controlling the risk-reward ratio
- setting up a stop-loss for automatic exits
A buy order is added when both of the following events happen at the same time:
- An Engulfing pattern closes above the lower of the Bollinger Bands.
- The risk-reward ratio is above the minimum value (1.0 by default). Calculated as the ratio of the distance between the high price and the upper Bollinger band to the distance between the high price and the stop price.
A sell to close simulated order is added when either of the following conditions is true:
- High price pierces the upper Bollinger band.
- Low price falls below the stop price.
- Stop price is equal to the current close less Average True Range multiplied by the specified factor.
Bollinger Bands with Engulfing is just one of many strategies that Archaide automates. For a full list of strategies and studies available click here.
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