Introduction to the Pain Indicator
The name of the Pain indicator is a custom forex indicator that shows the OHL#C candlestick price ratio over a specified time period. This is an oscillator.
The indicator is displayed in a separate window placed just below the main trading chart.
It fits all kinds of timeframes and currency pairs.
The default indicator settings can be modified directly from the input tab. Feel free to experiment with the settings and parameters to fit your personal preferences. Let’s take a closer look at these inputs below.
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
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).
How to set up the Pain indicator in MT5?
Copy and paste the Pain.mq5 or Pain.ex5 indicator files into the MQL5 folder of the Metatrader 5 trading platform.
You can gain access to this folder by clicking the top menu options, which goes as follows:
File > Open Data Folder > MQL5 > Indicators (paste here).
Now go to the left side of your MT5 terminal. In the Navigator find the gauge name, right-click it and select Attach to the chart.
The Pain indicator is well worth adding to your trading collection but remember about having realistic expectations. Just like any other technical analysis tool, is not capable of providing accurate signals 100% of the time. Thus, this forex indicator provides false signals occasionally. Its performance will vary significantly depending on market conditions. Feel free to develop your own trading system based around it.
Pain Indicator Free Download
To download the Pain Indicator for Metatrader 5 (MT5) for free just click the button below: