Volume Engulfing Detector

This indicator is built to detect powerful shifts in market participation by analyzing volume surges during directional candles — not traditional "engulfing" patterns based on candle body structure, but volume-driven dominance by buyers or sellers.

Instead of relying on the classic visual engulfing pattern, it flags situations where a bullish or bearish candle prints with significantly higher volume than its predecessor, and where that volume also surpasses key benchmarks from previous opposing moves.

This approach is designed to capture institutional activity, smart money footprints, or hidden accumulation/distribution, which often manifest as volume spikes even in the absence of textbook candlestick formations.
🚦 Key Features
✅ 1. Volume-Based Engulfing Detection
The script identifies candles where:

A bullish candle's volume exceeds the previous candle’s total volume and the previous candle was bearish (and vice versa for bearish engulfing).

Additionally, the bullish engulfing volume must also be greater than the volume of the last bearish engulfing (and vice versa).

This helps filter out false engulfing signals and only highlights the ones with significant participation or conviction.

🔷 Plotted with: Vol↑Eng (Green label below candle)
🔻 Plotted with: Vol↓Eng (Red label above candle)

✅ 2. High-Volume Rejection Markers (Non-Engulfing)
Sometimes a candle doesn’t engulf the previous one, but the volume is so dominant that it may still indicate a powerful reversal or failed breakout. This indicator flags those too:

If a bullish candle has volume higher than any bearish engulfing volume seen today, it’s marked as a potential buy-side absorption.

If a bearish candle has volume higher than any bullish engulfing volume today, it may be a sign of sell-side rejection.

🟢 Plotted with: Vol↑Big (Lime triangle up)
🔴 Plotted with: Vol↓Big (Maroon triangle down)

⏰ Daily Reset & Filtering
All volume comparisons are done within the current trading day, so each day's context is treated independently.

The first candle of the day is ignored, preventing skewed signals due to overnight gaps or opening volatility.

🔔 Alerts Included
You can set alerts on:

Bullish or bearish volume-engulfing candles.

High-volume rejection candles.

This ensures you’re notified in real time when the market shows signs of strong accumulation or distribution, even if you're not actively monitoring the chart.

💡 Use Cases
Day Traders: Identify potential intraday reversals or trend initiations with volume confirmation.

Swing Traders: Use engulfing and high-volume patterns to time entries after pullbacks or breakouts.

Volume Analysts: Study how price responds when volume exceeds critical historical thresholds.

Tape Readers: Get a visual clue of where smart money might be stepping in based on volume surges.

📌 Final Thoughts
This indicator filters out noise and focuses on volume-dominant price actions, giving you a cleaner and more actionable view of the market. Use it to complement your existing strategy, particularly when looking for high-conviction turning points on the chart.

Whether you're trading equities, indices, or futures — this tool brings volume context to price action in a simple and visual way.