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Bearish Engulfing (for short trades)

The strategy is based on 2 candlestick patterns.

A sell is generated when the following conditions occur over the previous 2 candles –

1.The overall trend is up

2.A green candle is followed by a red candle

3.The open of the red candle is higher than the close of the green candle

4.The close of red candle is lower than the open of the green candle.

The strategy is useful to identify short trades only. The buy signal (as defined by the Buy Script) given here is based on an arbitrary logic, consider the Buy Script as a place holder here. The trader can define his own Buy logic. For example buy after realizing 5% profits.

Buy script

Sell script

Additional notes

You can read more about Bearish Engulfing pattern here - http://zerodha.com/varsity/chapter/multiple-candlestick-patterns-part-1/