Wednesday, December 12, 2018

Pin Bar indicator: Trusted Assistant for Finding Patterns

Many traders think that the Pin Bar is one of the most reliable candle patterns, where the introduction of this pattern is used both as a full strategy and combined with other strategies, so don't be surprised if you find some display indicators with names the same one.

Before we continue to explain this indicator, we must remind you that the pin bar is a candle that has a short body and at least one long shadow. This pattern was created by Martin Pring, where he realized this: When the exchange is ready to spin direction, there will be "traps", and the last candle will see a "nose" that extends like the Pinocchio when he lied. This is not a joke, this pattern was first called "Pinocchio", but later the shortened name came into use.

Today's topic will be very interesting, and it even seems to appear as if it has a contradiction, because many traders are accustomed to separating indicators from candlestick patterns, which means that the traders if they don't use indicators, they will use the Price Action method (they will choose one of these methods).

The fact is, this pin bar indicator is a very common indicator, a software that only makes the process of looking for patterns rather than candles automatically, so traders don't need to make additional calculations that can cause delays to get signals to make a position.

Indicator Pin indicator bar called PinBar

What I can say, the creators of this indicator have taken the right step by deciding not to create a new name that is unique to this indicator because this indicator was created only to display a pattern with the same name. The main thing with this is that the creators have made careful calculations so that this indicator has been known as one of the best indicators for the Metatrader 4 terminal. This indicator is displayed on the price chart as listed below:

This PinBar indicator automatically indicates bullish patterns with green arrows, where after the arrows appear, the exchange will have a very high probability of turning around after the decline, and the red arrows instead display bearish patterns, often occurs when there is a decrease in the strength of the bullish trend.

We cannot mention anything about the settings, because by default this indicator has been determined and does not require any intervention from the traders, namely to avoid confusion, the creators of this indicator do not make access to change the settings in this software and only provides settings for changing colors rather than arrows that indicate price trend patterns.

There is no obvious error in this case, because fake warnings often occur at any time, which is not an error that occurs because of an error in the software codes, but only because of a specific error in the field of understanding a pattern reading, i.e. You must understand theories in price action (to filter out weak patterns), and then you can start trading.

MTF PinBar Scan: Indicator pin bar for several time periods

It is no secret that one of the advantages of a candlestick pattern is its versatility, namely that it can be used throughout a period of time except for a period of time per minute, and a combination of several strategies in one currency pair is a phenomenon that is very often seen today.

Unfortunately, not all traders, especially beginners, can have workplaces with multiple monitors (to monitor the situation at various times), perhaps because they don't see the benefit of investing in equipment before getting a stable result, or because objectively they cannot spread their attention because they have real jobs outside of trade.

To solve such problems, the MTF PinBar Scan pin bar indicator is created, to display patterns that occur over a period of time, where creators rather than this indicator do not limit the possibilities of the arrows, and add color to signals for candles or beams. The figure above shows an example, and below are the main settings that can be changed by the users according to the wishes of each user and will be briefly explained below:

barsback - for what period (according to the number of candles taken into account) these patterns are displayed. If added when used in a short period of time it can sometimes cause the terminal to become stuck;

  • arrows - to show or delete pointing arrows;
  • arrowsize - the font size of the arrows;
  • bullarrow and beararrow - colors rather than those arrows;
  • paintbar - turns on or removes thickening on the candle;
  • barthickness - the width of the line used to fill the candle;
  • bullishcol and bearishcol - colors rather than bullish and bearish patterns (colors that fill);
  • alarm and sound - sound settings for notifications or warnings;
  • alerts - displays a pop-up window for warnings;
  • m5, m15, m30, m60, etc. - add or remove the time period that you think does not need to be used to identify the existing candle patterns;
  • Other settings can be left as determined by the creator.
  • Pin bar indicators for MetaTrader 4 and MetaTrader 5

Contrary to the indicators we discussed above, the following indicators, which are known as PinbarDetector, have been optimized for use in both types of MetaTrader terminals (written with codes mql4 and mql5). Visually, it is no different from the PinBar indicator, it's just that it uses emoticons - green for bullish patterns, red for bearish patterns - to show signals other than the use of arrows.

If you see it for the first time, the use of emoticons will look as if this indicator is like playing games, but in fact this pin bar indicator is very useful for experienced traders, who prefer to match indicators to show only decent patterns to note. We emphasize the advantages of setting up not without reason - because of the fact that the PinBarDetector indicator allows us to set all important settings, such as:

Read to How to trade Multi Time Frame with Stochastics
  • UseCustomSettings - if you set it to true, then this indicator will obey the calculation of the patterns as defined by the user, where we will discuss it further one by one;
  • CustomMaxNoseBodySize - limits the ratio of the shadow of a main candle to its body; and the higher the value, the more reliable the signal is given;
  • CustomLeftEyeOppositeDirection - if turned on, the right eye of the bearish pin bar must be strictly below the left eye, and above for a bullish pattern. We remind you that "eye" is a very important element than the "Pinocchio", like "the nose;
  • CustomNoseSameDirection - if set to true, only patterns showing canlde and "nose" bodies point in the same direction to be calculated, so if the pattern shows bearish, then the closing price must be lower than the opening price, and the reverse for pattern formation - bullish pattern;
  • CustomNoseBodyInsideLeftEyeBody - this setting makes a rule for this indicator to pay attention to only patterns that have a middle range of the candle body that is between the high and low points of the left eye;
  • CustomLeft EyeMinBodySize - minimum ratio for main body rather than candle to left eye;
  • CustomNose BodyToLeftEyeBody - limits the ratio of the size of the nose to the range of the left eye rather than the pin bar;
  • CustomLeft EyeDepth - the minimum ratio of the depth of the left eye to its length. For those who don't really understand the theory of candle patterns it is not recommended to change these settings

To summarize all of this, we must note that each of the indicators we discuss today has its own advantages. For example, this PinBar indicator is very useful for beginners, the PinBar Scan indicator is very useful for traders who prefer to work at the same time with several periods of time, and the PinBarDetector indicator will be very interesting for experienced traders.

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