Definition of a pin bar (indecision candle) for MT4

Beginner Questions
1

Hi,
One tool is being developed for MT4 and it analyzes most recently closed two (2) candles. The tool, as one of several features, has to correctly decide whether the most recently closed single candle, so the latter one is the latest two closed once, is so called indecision candle (Pin Bar) or not. This is important for the tool to correctly automatically analyze in order to perform upcoming operations on defined (in the tool’s setting) time frame(s).

Any type of indecision candle.

My question: I don’t like the idea of having defined whether the candle is indecision or not based on the ratio ( % ) between candle body size (height) and total size (range) of the candle. There are multiple reasons why I’m trying to avoid having ratio defined, in order for tool to decide if its indecision candle or not, but major two reasons are:

  1. sometimes upper and/or lower shadow is missing or it’s extremely long or it’s extremely small which could put the accuracy of the ratio in doubt.

  2. there is no clear rule, not ever theoretical one, that equal or below particular % is an indecision or not. E.g. body size being equal or below one third (33.3333%) of total candle size is indecision otherwise its not indecision candle. This is NOT true! There is no such valid rule about % what is indecision and what not.

Particularly for this purpose I’m trying to avoid having ratio defined. So please kindly don’t tell me to just lower the % of ratio or test multiple % values and see which one will work the best because it won’t work that way.

My question: Could you please suggest me any other way how the tool ‘‘decide’’ whether the candle is indecision or not? Analyzing the length of shadows (if not missing) won’t work either.

Thank you in advance!

2

You need other confluences besides these indecision candles, whether its higher time frame analysis, indicators or support and resistance

3

Thomas Bulkowski’s work is always my first authority on candlestick patterns. After that Steve Nison.

but be aware that the efficacy of pin bars and other candlestick patterns has all been base don research and back-testing done markets with a closed session, unlike forex. Therefore overnight gaps, which are impossible in forex, are key to some of the definitions used and are a normal part of the landscape in others. You have to assume that no classic candlestick pattern will work as well in forex as the text books say they work.

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4

It is not possible to trade on candles alone. I need to understand market sentiment. If the market context instructs me to sell then I can analyze the candle.

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