Pinocchio Indicator for MetaTrader 4: Quality Reversal Trading Signals
The Pinocchio indicator is a technical, analytical tool designed to identify trend reversals and find optimal market entries.
This indicator does not have a visual display in a separate window. Pinocchio signals are displayed as labels on the price chart and as an audio signal. This avoids the double interpretation of indicator values. All calculations are carried out directly in the program code and are displayed to the user in the form of a clear signal. The trader can only decide whether to follow these signals or not.
The Pinocchio indicator is based on a pin-bar, which is a figure in graphical analysis. The pin-bar itself is a Price Action reversal pattern. In this indicator, in addition to finding the pin-bar according to the parameters specified in the settings, the found pin-bar can be sorted by useful filters inside the indicator, the values of which are also set in its settings.
Pinocchio contains the following parameter settings:
- The parameter Pinocchio Body Percentage is the value of the size of the body of the candle in relation to the "nose" of the candle indicated in percentage. By default, it is 60. This means that the body of the pin-bar that the indicator will find on the chart is 60% of its tail or less. By increasing or decreasing this parameter, you set the percentage criteria for finding the pin-bar shape. Since this is a percentage value, the value of this parameter cannot be lower than 0 and higher than 100.
The validity of Pinocchio calculations
As mentioned above, the pin-bar model itself is a good reversal pattern. The pin-bar filtering algorithms used in this indicator for extremums and candlestick sizes increase the likelihood of a trend reversal where the indicator indicated the appearance of such a pin-bar.
The default settings are experimentally set average optimal values that suit most trading assets. In addition to using the indicator as a complete trading system, you can use it to identify extrema, to search for impulses by the size of the candles.
Pinocchio indicator is a self-contained full-fledged tool for trading. Using a good system of money management and risk control, you can build complete trading systems using only one indicator. Examples of trading strategies based on the Pinocchio indicator can be found in the Strategies section of our website.
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Do you need help with installing this indicator into MT4 for Windows or Mac OS? Our guide HERE will help you.