Bullish Engulfing at Daily Support (Pivot Low) - R Target (v6)

1. What this strategy really is (in human terms)

This strategy is not about predicting the market.

It’s about waiting for proof that buyers are stepping in at a price where they already should.

Think of it like this:

“I only buy when price falls into a known ‘floor’ and buyers visibly take control.”

That’s it.

Everything in the script enforces that idea.

2. The two ingredients (nothing else)
Ingredient #1: Daily Support (the location)

Support is an area where price previously fell and then reversed upward.

In the script:

Support is defined as the most recent confirmed daily swing low

A swing low means:

Price went down

Stopped

Then went up enough to prove that buyers defended that level

This matters because:

You’re not guessing where support might be

You’re using a level where buyers already proved themselves

“At support” doesn’t mean exact

Markets don’t bounce off perfect lines.

So the script allows a small zone (the “support tolerance”):

Example: 0.5% tolerance

If support is at 100

Anywhere between ~99.5–100.5 counts

This prevents missing good trades just because price was off by a few ticks.

Ingredient #2: Bullish Engulfing Candle (the trigger)

This is the confirmation.

A bullish engulfing candle means:

Sellers were in control

Buyers stepped in hard enough to fully overpower them

The bullish candle’s body “swallows” the previous candle

Psychologically, it says:

“Sellers tried, failed, and buyers just took control.”

That’s why this candle works only at support.

A bullish engulfing in the middle of nowhere means nothing.

3. Why daily timeframe matters

The daily chart:

Filters out noise

Reflects decisions made by institutions, not random scalpers

Produces fewer but higher-quality signals

That’s why:

The script uses daily data

You typically get very few trades per month

Most days: no trade

That “boredom” is the edge.

4. When a trade is taken (exact conditions)

A trade happens only if ALL are true:

Price drops into a recent daily support zone

A bullish engulfing candle forms on the daily chart

Risk is clearly defined (entry, stop, target)

If any one is missing → no trade

5. How risk is controlled (this is crucial)
The stop loss (where you admit you’re wrong)

The stop is placed:

Below the support level

Or below the low of the engulfing candle

With a small ATR buffer so normal noise doesn’t stop you out

Meaning:

“If price breaks below this area, buyers were wrong. I’m out.”

No hoping. No moving stops. No exceptions.

Position sizing (why this strategy survives losing streaks)

Each trade risks a fixed % of your account (default 1%).

So:

Big stop = smaller position

Small stop = larger position

This keeps every trade equal in risk, not equal in size.

That’s professional behavior.

6. The take-profit logic (why 2.8R matters)

Instead of guessing targets:

The strategy uses a multiple of risk (R)

Example:

Risk = $1

Target = $2.80

You can lose many times and still come out ahead.

This is why:

Win rate ≈ 60% is more than enough

Even 40–45% could still work if discipline is perfect

7. Why patience is the real edge (not the pattern)

The bullish engulfing is common.

Bullish engulfing at daily support is rare.

Most people fail because they:

Trade engulfings everywhere

Ignore location

Lower standards when bored

Add “just one more indicator”

Your edge is:

Saying no 95% of the time

Taking only trades that look obvious after they work

8. How to use this strategy effectively (rules to follow)
Rule 1: Only take “clean” setups

Skip trades when:

Support is messy or unclear

Price is chopping sideways

The engulfing candle is tiny

The market is news-chaotic (earnings, FOMC, etc.)

If you have to convince yourself, skip it.

Rule 2: One trade at a time

This strategy works best when:

You’re not stacked in multiple correlated trades

You treat each setup like it matters

Quality > quantity.

Rule 3: Journal screenshots, not just numbers

After each trade, save:

Daily chart screenshot

Support level marked

Entry / stop / target

After 50–100 trades, patterns jump out:

Best tolerance %

Best stop buffer

Markets that behave well vs poorly

That’s how the original trader refined it.

Rule 4: Expect boredom and drawdowns

You will have:

Weeks with zero trades

Clusters of losses

Long flat periods

That’s normal.

If you “fix” it by adding more trades:

You destroy the edge.

9. Who this strategy is perfect for

This fits you if:

You don’t want screen addiction

You prefer process over excitement

You’re okay being wrong often

You want something you can execute for years

It is not for:

Scalpers

Indicator collectors

People who need action every day

10. The mindset shift (the real lesson of that story)

The money didn’t come from bullish engulfings.

It came from:

Defining one repeatable behavior

Removing everything else

Trusting math + patience

Doing nothing most of the time

If you want, next we can:

Walk through real example trades bar-by-bar

Optimize settings for a specific market you trade

Add filters that increase quality without adding complexity