Strategy test · pattern

Does Engulfing pattern work?

Bullish or bearish engulfing bar. Tested on every popular stock and coin, with real trading costs taken off.

The short answer

After costs, it kept money on 7 of the 9 stocks and coins we test.

It gave a signal 685 times and worked 189 of them (28%). On average each trade kept +0.06R.

Instrument	Kept a trade	Hit rate	Worked	Signals
AVAX Avalanche	+0.20R	32%	25	78
BTC Bitcoin	+0.17R	33%	23	69
SOL Solana	+0.12R	28%	23	81
LINK Chainlink	+0.09R	27%	21	77
ADA Cardano	+0.09R	28%	21	76
DOGE Dogecoin	+0.08R	27%	24	90
LTC Litecoin	+0.05R	28%	22	78
XRP XRP	-0.16R	24%	16	68
ETH Ethereum	-0.16R	21%	14	68

How we tested

Up to 5 years of daily prices for each stock and coin.
Every time the strategy leaned up or down, we took a pretend trade that way. Stop 1.5 ATR away, target 2.25 ATR away, closed after 10 trading days if it hit neither. ATR is how much the price usually moves in a day.
Worked means it reached the target before the stop. If both were touched on the same day, we count it as a loss.
Costs come off every trade: 0.02% a round trip for stocks, 0.2% for crypto.
Kept a trade is in R, the amount risked. +0.10R means 10 cents kept for every dollar risked, on average, after costs.
Strategies that fired fewer than 40 times on a stock are left out: that few is luck.

Re-run every day. Past results do not promise future ones. This is software output, not financial advice.

Other pattern strategies

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Orenth runs all 34 strategies on any stock or coin, and says so when none of them has an edge.

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Analysis software, not financial advice. Every figure here is measured from historical price data and can stop describing the future at any moment. Day trading loses money for the large majority of retail participants, and this tool's own measurements agree with that. Never risk money you cannot afford to lose.
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Analysing

Fetching data, running 34 strategies, and back-testing each one against this instrument's own history.