Please, how does this indicator work?

This is an indicator that i am using to base a system around. You can see more about it at this thread i started over on the Rookie Q&A forum.

http://www.forexfactory.com/showthread.php?t=92593

It is a basic price action indicator. I noly use the pin bar function of it and understand 90% of what it does.

I am especially keen on understanding exactly how it is defining a pin.

From the code;

if( nose_length/bar_length > Min_Nose_Ratio/100.0 &&
body_length/bar_length < Max_Body_Ratio/100.0 &&
(High[bar_num]-High[bar_num+1]>=bar_length/3.0 ||

I think it is saying that the nose must be at least the min nose ratio

The Body must be no longer than the max body ratio

The nose must protrude by at least a third of its length.

I dont know what the || means.

I can't work out what conditions the code directly after it is adding;

(High[bar_num]-High[bar_num+1]>=bar_length/4.0&&body_length/bar_length<0.2)) &&
Low[bar_num]<Low[bar_num+1])



Could someone please enlighten me as it is a fundamental part of my system and i dont know exactly what it is doing


There are also many times when i expect the indicator to flag but it doesn't. This is causing me to miss lots of great trades

Here are some examples, the first one is a trade i have just entered.







Thanks in advance

Paul

|| is the "OR" function.

I assume the original code looked like this:

if( nose_length/bar_length > Min_Nose_Ratio/100.0 &&
body_length/bar_length < Max_Body_Ratio/100.0 &&
(High[bar_num]-High[bar_num+1]>=bar_length/3.0 ||
(High[bar_num]-High[bar_num+1]>=bar_length/4.0&&body_length/bar_length<0.2)) &&
Low[bar_num]<Low[bar_num+1])


Time to dissect:

nose_length/bar_length > Min_Nose_Ratio/100.0

The nose length is greater than the nose ratio.

body_length/bar_length < Max_Body_Ratio/100.0 &&

the body length is less than x% of the total bar

(High[bar_num]-High[bar_num+1]>=bar_length/3.0 ||

The current high - the previous high is greater than 1/3 the bar length or

(High[bar_num]-High[bar_num+1]>=bar_length/4.0&&body_length/bar_length<0.2)) &&
Low[bar_num]<Low[bar_num+1])

The current high - the previous high is greater than 1/4th the bar length and the body length is less than 20% of the bar length.

and the current low is less than the previous low.

Thanks very much, that makes a bit more sense, logically it looks like it is saying that if th nose only sticks out by a quarter i.e. not so good, then it can be a pin but the body has to be smaller in comparison to compensate

Ronald Raygun, I forgot to attach the indicator last post, so ive done it this time. Have you any idea why it did not flag in the examples?

Thanks for your reply

Paul

This indicator I think defines a pin bar not merely by the shape, but also by the location relative to the previous bar as described in this document

http://www.ebookspdf.com/business/50...nced-material/

I am assuming that another condition is that the open and close have to be within the limits of the previous bar and probably the tail as well?

Yep. I'll go through the entire code eventually, but location relative to the previous bar is the major factor involved I suspect.

Any progress on this yet, Ronald?

I'm just another curious pinhead!

Greetings Opie999, so you trade pins as well?

If you don't mind me asking, what is your technique, do you trade pins only?

Got any tips?

Regards Paul

This really is a great indicator but i would love to know why it misses trades such as those detailed above.

It's caught me some great trades this week, but it could be improved so that it's even better.

What would be absoloutely great is if there could be a user defineable input of 'Min Bar Length'

This could then be set for each pair (each timeframe as well would be mustard!) to stop the alert on any bar that's too small.

This really is the backbone of my system and i would love some help,

so please!.....anyone?

If not could you point me in the right direction

Regards Paul.

Per your request, I modified the indicator so that you can change the "dividing ratios". Quick rundown:

divider1 = 3.0 - This was the original divider to divide the bar into thirds on the higher timeframes instead of quarters.

divider2 = 4.0 - This was the original divider to divide the lower timeframe bars into quarters when running the calculations.

divider3 = 0.2 - This was the original body ratio that the bar had to have in order to count. 0.2 means a 20% body ratio, 0.3 would mean 30% body ratio, etc.

You'll have to play around with the settings to see what you want to set each one for.

Jeez that was quick Jedi,

Thanks for your work but i am lost. Please excuse me but could you explain a little further.

How did the ind. calculate in the first place?

Did it do things differently for higher and lower TF's if so how. What does it class as higher/lower TF's

What are dividers? are you refering to how much the 'nose' of the pin sticks out

Is it 1/4 for small TF's and 1/3 for higher. What are classed as lower and higher TF's?

Does it mean i can now set the 'Min protrusion value' of the nose so to speak.

Sorry for being such a klutz but I'm lost.

Thanks again Paul

Sorry for the confusion, I realise now that was a bit vague of an explanation.

The indicator was coded so that it looked at each time frame individually. It had different internal parameters for each time frame from 5m, going up to the monthly. The larger time frames, from 4hr and up, used an extended ruleset as for what constituted a pin bar. The higher time frames were able to use either a third for the nose length, or still just a quarter. That is why two of the changeable parameters are a 3 and a 4, indicating the parameters where the range of the bar was divided by 3 or by 4. You can change that now to just about anything, so long as you make sure you enter it as a decimal. IE: 4 should be put in as 4.0.

As for the divider3, or 0.2 value; that is the maximum allowable size of the "body" of the pin bar in comparison with the candle's total range. By making it 0.2, the "meat" of the candle must be 20% or less than the total range of the bar. Changing that to something like 0.3 would make the "meat" value have to equal to or less than 30% of the bar's total range.

Addendum: I missed a couple of things in editing the mq4 file. Attached is a thoroughly updated one.

Thanks for the explanation Jedi that was crystal clear.

After all this time of using the indicator i didnt know that there were different rules for different timeframes!

Thats great though, having the ability to change the protrusion length, thanks.

How easy would it be to add one final set of inputs?

They would look something like this;

Min bar length for M1 = 10

Min Bar Length for M5 = 12

Min Bar Length for M15 = 15

Min Bar Length for M30 = 18

Min Bar Length for H1 = 25

Min Bar Length for H4 = 35

Min Bar Length for D1 = 45

These parameters would be user defineable and would mean that the indicator could be perfectly customizable for each pair and each TF.

If you are interested, I have started a thread called ' Any Pin Will Do' over on the rookie forum.

Here I explain my theory that a pin is a pin regardless of where it is located.

When you start dropping TF's there are many many trades during a week, the only problem becomes spread.

To achieve a minimum R:R ratio of say 1 : 0.75 the candles must be a minimum length.

This addition of code would allow me to filter out all of the low reward trades.

Hopefully, with this amount of customisation it should be possible to fine tune every timeframe for every pair and know that when this alerts, it will just be a case of entering the trade.

I feel a bit cheeky asking for this but it would really be the icing on the cake.

Regards Paul.




P.S. any ideas why the indy would miss the clear pins i identified in the screen shots?

I'm not sure if the indicator repaints or not. I cant see why it would because if the conditions are met on bar close then nothing is going to change after that.
To be honest, that is one of the best features of these trades, also being able to backtest accurately.

Is it something to do with the indy refreshing the chart and just not drawing on the smiley?

Sorry for all the questions but you really seem to know what you are doing. Ta