Sweep and Engulf Strategy

// This Pine Script® code is subject to the terms of the Mozilla Public License 2.0 at https://mozilla.org/MPL/2.0/ MPL-2.0
//@version=6
strategy("Sweep and Engulf Strategy", overlay = true, initial_capital = 1000000, default_qty_type = strategy.fixed, default_qty_value = 1, max_boxes_count = 500)

// --- Inputs ---
// Filters
bool   invertTrades     = input.bool(true, title = "Invert Strategy (Trade Opposite)", tooltip = "If enabled, takes a Short on a bullish pattern and a Long on a bearish pattern.", group = "Signal Filters")
string prevCandleFilter = input.string("Any", title = "Previous Candle Direction", options = ["Any", "Same Direction"], tooltip = "If 'Same Direction' is selected, a bullish sweep requires the previous candle to be bullish, and a bearish sweep requires the previous candle to be bearish.", group = "Signal Filters")

// EMA Settings
bool   useEma           = input.bool(false, title = "Use & Show EMA Trend Filter", tooltip = "If enabled, displays the EMA and filters signals: bullish only appear when price is above the EMA, and bearish only appear when price is below.", group = "EMA Trend Filter")
int    emaLength        = input.int(200, title = "EMA Length", minval = 1, group = "EMA Trend Filter")

// Risk Management
string slType           = input.string("ATR", title = "Stop Loss Method", options = ["ATR", "Candle High/Low"], tooltip = "Choose how the Stop Loss is calculated. 'Candle High/Low' places the stop at the extreme of the signal candle.", group = "Risk Management")
int    atrLength        = input.int(14, title = "ATR Length", group = "Risk Management")
float  slMult           = input.float(1.5, title = "ATR Multiplier", step = 0.1, group = "Risk Management")
float  rrRatio          = input.float(2.0, title = "Risk/Reward Ratio", step = 0.1, group = "Risk Management")

// --- State Variables ---
var bool  inTrade    = false
var int   tradeDir   = 0
var float entryPrice = na
var float slPrice    = na
var float tpPrice    = na
var int   entryBar   = na
var box   boxTp      = na
var box   boxSl      = na

// --- Logic ---
// EMA Calculation
float emaValue = ta.ema(close, emaLength)
bool  isUptrend = close > emaValue
bool  isDowntrend = close < emaValue

// Determine previous candle direction
bool prevBullish = close[1] > open[1]
bool prevBearish = close[1] < open[1]

// Check if the previous candle matches our filter requirements
bool reqBullish = prevCandleFilter == "Any" or prevBullish
bool reqBearish = prevCandleFilter == "Any" or prevBearish

// Trend filter conditions
bool trendBullish = not useEma or isUptrend
bool trendBearish = not useEma or isDowntrend

// ATR Calculation
float atr = ta.atr(atrLength)

// Trade Management (Exit Logic)
if inTrade and bar_index > entryBar
    bool hitTP = (tradeDir == 1 and high >= tpPrice) or (tradeDir == -1 and low <= tpPrice)
    bool hitSL = (tradeDir == 1 and low <= slPrice) or (tradeDir == -1 and high >= slPrice)

    if hitTP or hitSL
        // Close the trade and lock box to current bar
        inTrade  := false
        tradeDir := 0
        boxTp.set_right(bar_index)
        boxSl.set_right(bar_index)
    else
        // Keep pushing the boxes forward while in trade
        boxTp.set_right(bar_index + 5)
        boxSl.set_right(bar_index + 5)

// Sweep & Engulf Conditions
bool bullishSweep = low < low[1] and close > high[1] and reqBullish and trendBullish and not na(atr)
bool bearishSweep = high > high[1] and close < low[1] and reqBearish and trendBearish and not na(atr)

// Apply inversion if enabled
bool rawLong  = invertTrades ? bearishSweep : bullishSweep
bool rawShort = invertTrades ? bullishSweep : bearishSweep

// Filter signals based on current trade state
bool longSignal  = rawLong and not inTrade
bool shortSignal = rawShort and not inTrade

// Trade Entry Logic
if longSignal
    inTrade    := true
    tradeDir   := 1
    entryBar   := bar_index
    entryPrice := close
    slPrice    := slType == "Candle High/Low" ? low : entryPrice - (atr * slMult)
    float risk = entryPrice - slPrice
    tpPrice    := entryPrice + (risk * rrRatio)

    // Execute Strategy Orders
    strategy.entry("Long", strategy.long)
    strategy.exit("Exit Long", from_entry = "Long", limit = tpPrice, stop = slPrice)

    // Draw TP/SL boxes
    boxTp := box.new(left = bar_index, top = tpPrice, right = bar_index + 5, bottom = entryPrice, border_color = na, bgcolor = color.new(#089981, 75))
    boxSl := box.new(left = bar_index, top = entryPrice, right = bar_index + 5, bottom = slPrice, border_color = na, bgcolor = color.new(#f23645, 75))

if shortSignal
    inTrade    := true
    tradeDir   := -1
    entryBar   := bar_index
    entryPrice := close
    slPrice    := slType == "Candle High/Low" ? high : entryPrice + (atr * slMult)
    float risk = slPrice - entryPrice
    tpPrice    := entryPrice - (risk * rrRatio)

    // Execute Strategy Orders
    strategy.entry("Short", strategy.short)
    strategy.exit("Exit Short", from_entry = "Short", limit = tpPrice, stop = slPrice)

    // Draw TP/SL boxes
    boxTp := box.new(left = bar_index, top = entryPrice, right = bar_index + 5, bottom = tpPrice, border_color = na, bgcolor = color.new(#089981, 75))
    boxSl := box.new(left = bar_index, top = slPrice, right = bar_index + 5, bottom = entryPrice, border_color = na, bgcolor = color.new(#f23645, 75))

// --- Visuals ---
// Plot EMA
color emaColor = close > emaValue ? color.new(#089981, 0) : color.new(#f23645, 0)
plot(useEma ? emaValue : na, title = "Trend EMA", color = emaColor, linewidth = 2)

// Plot shapes above/below the triggering candle
plotshape(longSignal, title = "Long Entry", style = shape.triangleup, location = location.belowbar, color = color.new(#089981, 0), size = size.small)
plotshape(shortSignal, title = "Short Entry", style = shape.triangledown, location = location.abovebar, color = color.new(#f23645, 0), size = size.small)