
Pain Indicator
Platform: MT5 Type: Oscillator Last update: September 24, 2024The Pain indicator is a custom forex indicator that shows the OHLC candlestick price ratio over a specified time period. This is an oscillator.
It’s good to be aligned with customizable inputs, which are the following:
Period – defines the period deployed in the calculation;
Method – defines the method used for the calculation.
The formula for the Pain indicator:
The calculations of the Pain indicator are based on the following formula:
Pain = (3*MA(Close) – MA(Open) – MA(High) – MA(Low)) / 2
Where:
MA – moving average with the Period time period and the Method calculation method.
How to use the Pain indicator:
That forex indicator allows determining a market sentiment, whenever it’s bullish or bearish. When the light green signal line is aligned above 0 level, the sentiment is considered bullish. Similarly, when the light green signal line is aligned below 0 level, the sentiment is considered bearish.
Another way of using the Pain indicator is divergence trading. In order to do that, a trader needs to wait for the price to make higher highs while indicator develops a corresponding lower lows (for bearish divergence). On the other side, a trader can wait for the price to make lower highs, while the indicator main signal line develops a corresponding higher highs (for bullish divergence).