Pain Indicator

Pain Indicator

The Pain indicator offers the best sentiment analysis solution in the market for MT5 users. Helps in identifying trend directions and buy/sell signals

The Pain is a technical analysis tool developed for the MetaTrader 5 platform. It closely monitors price volatility, assesses market sentiment and predicts future trend directions.

This indicator gives you a general idea of ​​how a group of traders or investors feel about the current state of the market for a trading asset. The purpose of this indicator is to assess the intention of the major market participants to predict the next possible price direction.

From a technical point of view, Pain works on all types of market conditions. During a trending market, it identifies price pullback areas so you can join the current price trend. Also during a sideways market, this tool gives an idea of ​​the possible direction of upcoming price breakouts.

How to do trend analysis with Pain Indicator
The value of the pain index is calculated based on the profit and loss of the price for the specified period. The indicator line moves up in a bullish trend and down in a bearish trend. It does not display a direct buy/sell or trend reversal signal. But if you keep a close eye on swing levels and indicator curve directions, you will get a clear idea of ​​the bull/bear strength behind the current price action.

According to the image above, the indicator value gradually increased following the EURUSD bullish trend. We have drawn a trend line in the indicator window to show how the indicator reacts before the price starts to follow the trend.

You will notice that the indicator line bounces up, creating a higher low each time it approaches the trendline area. Even during pullback periods, the price did not move below its previous low. This reflects the bullish sentiment behind the overall market condition. Each time the price breaks out of the consolidation range, Pain fluctuates upward, indicating a continuation of the current bullish trend.

Conclusion
Market sentiment can be influenced by both technical and fundamental factors. This could be important news or a price breakout of a major support/resistance level that could drastically change the expectations and motives of major market participants. As such, it is always prudent to determine how other traders feel about current market conditions before making a trading decision. However, it is difficult for beginners to bring together technical and fundamental factors to predict the upcoming price movement. In this respect, the Pain indicator makes it much easier to study the balance between bullish and bearish power behind price.