price action made eazy

Quoting hilmy83

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my proposed strategy:

use the indicator for 3 separate periods on the daily (5,13,21). This measures the market health in 5, 13, and 21 days.

enter trade when all 3 are all positive (long) or negative (short)
cover position (moving s/l) when 5 period is negative
close position when period 5 and 13 are negative

s/l is up to the trader. I'm using my old methods of s/r and pivots

the indicator is different because i took out the division by 2 out of the original formula. I don't see any relevance of that. And I use EMA for moving average. Thanks to tesla for coding it in

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Quoting hilmy83

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after trading price action for a while, I felt that I needed a better way to collect all the information from the chart. Since my background is in engineering, I do feel that mere discretionary observation is apparently my weakness in trading off price action. I like numbers and 1 or 0 decision (if you know what I mean) .
So I stumbled upon this formula

http://www.forexrealm.com/technical-...indicator.html

(PriceActionINdicator or PAIN for short)
I love this formula because it captures the essence of candlestick psychology into easy to understand format

Basically it's composed of 3 components: C-O, C-H, C-L

We want to know whether the bulls or the bears are in control by looking at candlesticks. And the values of the 3 components will let us know

C-O (close-open): this tells us if the bulls or the bears are in control at the end of the time period. If it's (+), bulls are in control and if it's (-), bears are in control

C-H (close-high): this tells us the power of the bears. If it's small the bulls are in power It is known that when price closes near its high, bulls are strong than bears since the bears weren't able to push prices back before the bar closes for the time period. But if the C-H is large, it tells us that the bulls have brought the prices high, but the bears definitely brought it down which shows they are exerting their position So if the value of C-H is small, bulls are in power, else, bears are.

C-L (close-low): this is similar to C-H except this refers to the power of the bulls.

So the formula PAIN = (C-O)+(C-L)+(C-H) will combine all the forces that are acting on a single candlestick. If the value comes up positive, bulls have a net power overall. If it's negative, bears are in power.

So I am going to test out this concept in the next few trades (in my journal) and spend analyzing it for the rest of the time.

I think this would definitely ease off some difficulties in analyzing price action..i know it did for me

I drew out hammers, shooting stars, dojis, etc and pick out some arbitrary numbers and use the formula and was amazed at the values given. It's very accurate analysis i think

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Quoting hilmy83

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after trading price action for a while, I felt that I needed a better way to collect all the information from the chart. Since my background is in engineering, I do feel that mere discretionary observation is apparently my weakness in trading off price action. I like numbers and 1 or 0 decision (if you know what I mean) .
So I stumbled upon this formula

http://www.forexrealm.com/technical-...indicator.html

(PriceActionINdicator or PAIN for short)
I love this formula because it captures the essence of candlestick psychology into easy to understand format

Basically it's composed of 3 components: C-O, C-H, C-L

We want to know whether the bulls or the bears are in control by looking at candlesticks. And the values of the 3 components will let us know

C-O (close-open): this tells us if the bulls or the bears are in control at the end of the time period. If it's (+), bulls are in control and if it's (-), bears are in control

C-H (close-high): this tells us the power of the bears. If it's small the bulls are in power It is known that when price closes near its high, bulls are strong than bears since the bears weren't able to push prices back before the bar closes for the time period. But if the C-H is large, it tells us that the bulls have brought the prices high, but the bears definitely brought it down which shows they are exerting their position So if the value of C-H is small, bulls are in power, else, bears are.

C-L (close-low): this is similar to C-H except this refers to the power of the bulls.

So the formula PAIN = (C-O)+(C-L)+(C-H) will combine all the forces that are acting on a single candlestick. If the value comes up positive, bulls have a net power overall. If it's negative, bears are in power.

So I am going to test out this concept in the next few trades (in my journal) and spend analyzing it for the rest of the time.

I think this would definitely ease off some difficulties in analyzing price action..i know it did for me

I drew out hammers, shooting stars, dojis, etc and pick out some arbitrary numbers and use the formula and was amazed at the values given. It's very accurate analysis i think

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Quoting Captain Piptastic

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According to the site you referenced the fomula is [(C-O)+(C-H)+(C-L)] / 2 not (C-O)+(C-L)+(C-H).

Might want to update your code.

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Quoting Taters

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You've invented the Pivot Point!

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Quoting Captain Piptastic

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According to the site you referenced the fomula is [(C-O)+(C-H)+(C-L)] / 2 not (C-O)+(C-L)+(C-H).

Might want to update your code.

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Quoting hilmy83

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and i don't think the order matters..

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Quote

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[(C-O)+(C-H)+(C-L)] / 2 not (C-O)+(C-L)+(C-H).

Quoting PipGod

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Isn't the name of this thread "price action made eazy"?

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Quoting mikhaildgreat

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Hello Hilmey,

iv been struggling with candlesticks myself, im a programmer so ive been attempting to encode all the candlesticks to generate signals in an EA. LOL it felt like I was writing a book. anyway Id just like to express my gratitude with sharing this simple formula, now i can put my candlestick EA to the test.

Regards,
Mikhail

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Quoting hilmy83

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hey let me know how it turns out..

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