By Nandkishor ji

A) PAIN indicator: Price Action Indicator.

It is calculated as follows,
(Close- Open) + (Close High) + (Close Low)/2
1) (Close- Open):- Defines intraday Momentum,
This can be positive or negative.
If the close happens to be greater than its open price then positive. Indicating
Buying has happened.
If the close is lesser than open then negative indicating selling has happened.
Wider the difference greater is the momentum.
2) (Close High):- Defines late buying pressure.
This is always negative.
Minimum difference means there is buying pressure.
Greater difference means selling pressure.
3) (Close Low):- Defines late selling pressure.
This is always positive.
Greater difference indicates close is near high, indicates -buying.
Lesser difference indicates close is near low, indicates selling.
It is interesting to note of the three components of the above equation their ch
aracters can be outlined as one is always negative, one is always positive, and
the other one may be positive or negative. Out of the three if 2 are positive an
d the one which is always negative shows smaller negative value , I t can be con
strued that buying is happening exhibiting bullish character. The opposite is tr
ue for selling or bear character.
This is what PAIN is described conventionally.
I have modified it a bit. I have also split it in to 3 values one that measures
rate of change and the other 2 indicate as soon as the trend changes. My 3 value
s are 1) PAIN 2) Bull price 3) Bear price.
Further their relationship with each other there by generating early signals for
entry exit and reversal of trade.
1) PAIN:-
=100 x (((Close- Open)/Open) + ((Close High)/High) + ((Close Low)/Low))/2.
It gives RATE OF CHANGE
Higher the PAIN greater is the GAIN.
Many a times it runs alongside ROC. This is very useful in Gap up & Gap down mar
kets. The stock may be positive ROC wise which is greater than zero but the PAIN
value may be negative, this is because the stock is not near its high but near
its low or open indicating selling pressure at the top.
I also grade PAIN value
0 to 3%:- Tentative buy, chances of hitting stop losses are more.
4 to 8%:- Confirm buy, No risk of stop loss 100% gain.
Above 8%:- Crazy buy, Sell everything you own for buying and buy to your capacit
y.
2) Bull Price:-
=Low + ((close-open) + (close-high) + (close-low))/2
3) Bear Price:-
= High - ((close-open) + (close-high)+(close-low))/2
Relationship between Close or Ltp, Bull Price, Bear Price
a) Close>Bull Price >Bear Price:-Always buy Greater the difference between LTP-B
ull and Bull- Bear .The prices are rallying near high.
b) Close>Bull <Bear. Prices are retracing from high. Time to exit long trades. I
f courageous reverse your long trades to short one keeping stop loss of Bear pri
ce.
c) Close<Bull<Bear:- Always sell Greater the negative difference between LTP-Bul
l and Bull- Bear .The prices are rallying near low