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Precision Index Oscillator ( Pi-Osc ) for MetaTrader 4

Roger Medcalf 2015 ... You may not reprint text or images without permission

If you require this product for a different Trading Platform then please see the product guide for the other supported platforms.

Precision Index Oscillator for MT4 was conceptualized by Roger Medcalf of Precision Trading Systems
 

Pi-Osc for MetaTrader 4 was created to provide accurate trade timing signals and is a consensus indicator which has some powerful improvements and differences to industry standard oscillators.

At first glance to the untrained eye it would appear like another other oscillator, but when viewing it in juxtaposition with other oscillators the true power of this indicator begin to emerge. To my knowledge there is no other indicator which pin points bottoms with the same high accuracy.

 
 
Precision Index Oscillator for MetaTrader shown below on hourly FTSE 100 Futures
 
Pi-Osc for MT4
 

Pi-Osc is extremely simple to use and the top and bottom early warning signals are flagged up when + or - 3.14 is reached, the actual trade signal the Precision Index Oscillator gives is when the it moves away from Pi.

This signal indicates a high probability that the next bar will reverse. Sometimes a large move will result, others may be small moves and occasionally the signal will fail and the price will not reverse.

There is no guarantee of a winning trade coming from every signal and traders must employ exit stops and good risk management if they are to be successful in the long run.

It is comprised of many different mathematical equations which measure price and volume movement in multiple timeframe sampling that predict with a high degree of accuracy where turning points in trends are likely to occur.

 
Precision Index oscillator can often help you pinpoint tops and bottoms with very high accuracy

I would like to emphasize that in technical analysis the art of picking bottoms is generally much easier than the art of picking tops.

The reasons are due to the different psychological forces at work. These are explained in greater depth on this site.

Pi-Osc buy signals are generally more reliable than sell signals for this reason.
 
Precision Index Oscillator on MT4
 

Rule 1:    Wait for the Bounce away from Pi

The shot below shows Pi-Osc correctly called the recent bottom on AUDJPY using a daily chart

 
Pi-Osc AUDJPY MetaTrader 4

Rule 2:    Wait for the Bounce away from Pi

As stated earlier, here you can see ( below ) the two buy signals both led to nice moves up but the sell signal merely led to a tiny move down before the uptrend resumed.
Pi-Osc for MetaTrader on Nikkei

PURCHASE <<<<

Rule 3    Use a stop loss ( and wait for the bounce away from Pi )

Below is an example of a Pi-Osc "flat line" occuring at +3.14 on an hourly chart of USDCAD

The procedure is again the same as before and that is simply to wait for it to bounce away from Pi
Pi-Osc flat line MT4 USDCAD
 
Below is an example of a Pi-Osc losing trade on 5th March, as with most trading methods one is generally advised to get out of losing trades before the loss gets too big. This way you retain a large amount of your trading capital ready for the next trade(s)

In the centre of the chart is another flat line signal which heralded a large price drop in the Nikkei futures.

Pi-Osc MetaTrader 5 Nikkei
 

Pi-Osc trade signal outcomes are NOT always predicatable.

The chart below is a good example of how things often turn out quite differently after observing a Pi-Osc trade signal.

The 1st sell signal on the ( far left below) gave a slow decline which sped up later.

The 2nd sell signal ( page centre below) did accurately call the end of a fast rally upward but the signal did not lead to a large move down, traders must use stops to prevent losses from bad signals.

The 3rd sell signal led beautifully to an instant collapse

The buy sell signal ( far right ) gave a nice modest v shape rally.

 

Precision Index Oscillator on Nasdaq 5 minute chart
 
 
 
 PI-Osc increases your chances of picking a top or bottom greatly compared to other technical analysis.

Below are four successive and correctly identified bottoms on NQ Futures 5 minute chart

Trading with the Precision Index Oscillator in such a short time frame as a 5 minute chart is NOT recommended and neither is any form of day trading, the screenshot is added just to satisfy those who will undoubtably ask me to add a short term chart screenshot.

Learn why is it NOT recommended to engage in day trading here

 
Piosc for MT4
 
PI-Osc ( red highlight below ) shows a precise top which led to a crash from 11300 to 10700 giving around 600 points from the Dax 30 futures on a 30 minute chart
Dax futures catching the crash PiOsc MT4
PI-Osc below shows two signals of modest magnitude.
Note the 2nd buy signal is double highlighted showing that the signals occurred twice in rapid succession, the first of which moved slightly lower before making a rally.
Precision Index Oscillator MT5 USDCHF
 

 

Rule 4  Use good risk management ( and  wait for the Bounce away from Pi )

Just sit back and wait for your Pi to come along and remember that in the stock market there is generally always a sucker ready to take the other side of your trade.

 

Precision Index Oscillator Pi-Osc for MetaTrader

Price per month

Price for lifetime

Stocks, Futures, Bonds, Forex, Real-time and Static data  

 

Author: Precision Trading Systems. (Protected code)

    

 

 

How does the Precision Index Oscillator for MetaTrader work?
 

The Pi-Osc indicator uses some very ingenious and logical factors in its calculations, some of these factors are found within conventional oscillators and some are not.

The components that go into computations are identified below.

Money flow index provides a simple snapshot of how sold out a stock or future really is and when measured in three different time frames gives a slick consensus view of money flow.

Relative strength index (RSI)  still the No1 most popular indicator in use today as its power to identify overbought and oversold qualities in sideways markets is exceptional. Its poor performance in trends is greatly reduced when seamlessly integrated with the PI-Osc algorithm.

Demand index, being one of the designers favourite indicators for measuring the future direction caused by a large volume trade is incorporated here as well as its exceptional efficiency as a divergence indicator. James Sibbet's creation provides an additional stellar incisive cutting accuracy to the Pi-Osc.

Divergences. Pi-Osc measures divergences which occur in five different time frames from two different indicators, realising that divergences are often spurious in their reliability, the designer only factors 4% of the total indicator reading from these. Paradoxically the buy and sell zones have to have at least one observation of a divergence to trigger a signal.

Volume is always a factor that precedes a price change, as stock prices cannot move without a real money value being assigned to it either as a recent trade or a bid-offer order being placed. The designer's understanding of volume patterns is very useful addition incorporated into the Pi-Oscindicators unique conception. 

Momentum frequently decelerates prior to market turning points and PI-osc is monitoring several timeframes of smoothed momentum samples in its calculations. But unlike a conventional rate of change or momentum indicator the Pi-Osc indicator scores a neutral reading when momentum is rising or falling fast, and a reading is only factored into the output when momentum is reducing, thus indicating a higher probability of success.

Probability is another feature of this algorithm. Although rarely used in industry standard oscillators, the designer has added a standard deviation (2.9) factor into this indicator as the more usual 2 standard deviations used in Bollinger bands is just not reliable enough to bet hard earned cash on. Normally distributed price sets have a 99.9% containment within 3.3 standard deviations, so when this is breached the Pi-Osc adds or deducts a further value to its output number.

Stochastics have similar attributes to RSI oscillators and have contributed a factor into PI-osc due to their smooth and reliable ability to identify buying and selling points on non trending markets.

Price patterns. Generally the industry standard oscillators just use the closing price to calculate their values, and although some indicators such as the stochastic use the high and low in their mathematics, few oscillators are actually programmed to respond to unique candlestick chart set ups. PI-osc is setting the standard with its intelligent programming to recognise when the current chart pattern is shouting Buy! Several of the more reliable patterns are factored into the algorithm. 

When all the maths is done, Pi-Osc does an exceptional job of determining true buying and selling points. Basically the trading interpretation is made very simple for you, as the buy and sell zones are so logically determined, not by one factor but from a large consensus "vote" from more than one different computation.

The benefits of this indicator are that it saves valuable time in "confirming technical analysis signals" and all trades know time is precious as large price changes can be missed in seconds while checking other confirming factors. It takes the hard work out of it, and lets your computer do the brain work. 

Ideally this indicator is best as an entry signal, and exits are best done with a trailing stop which has a logical trend following exit, as its quite rare that the Pi-Osc will run right to the other extreme and issue a reverse signal.

 
Precision Index Oscillator (Pi-Osc) on weekly chart of Dax 30 index futures

There are 5 signals show in the chart below ( Commentary is given from left to right )


1st buy signal ( far left ) this one is a good example of why stops needs to be placed a reasonable distance away from the market noise as sometimes the price can go slightly lower before making a move.

2nd signal (sell) led to an instant and violent price drop which rallied hard after. Showing why trailing stops are essential to lock in some profits.

3rd signal ( buy signal in centre ) the ideal scenario with a very small retest followed by a monster rally.

4th signal ( sell ) no price drop occurred and traders have to get out a take the loss

5th signal ( sell ) another violent collapse just the way we want them

Pi-Osc on weekly Dax futures catching some big moves
 
Precision Index Oscillator (Pi-Osc) on hourly chart of GBPUSD

1st buy signal ( far left ) this is another good example of why stops needs to be placed a reasonable distance away from the market noise as sometimes the price can make a re-test before making a move. This one did not make a lower low and made a decent rally upwards.

2nd buy signal: Just the perfect trade dream, up and away in a straight line.

3rd signal ( sell ) would have provided a nice exit for the previous long and did go slightly lower before uptrend resumed

4th signal ( buy ) a tiny rally which would result in a small profit or small loss depending on how tight stops were

5th signal (buy) a slow grinding move upwards

Eyeballing the historical performance of trade signals is an essential element to do in order to make good educated decisions on stop loss controls.
Pi-Osc on forex 1 hour Cable chart
 
PI-Osc losing trade signals and how to handle them

Below there was a buy signal which can be exited on a trailing stop or on the occurance of a sell signal.

If the sell signal (shown by red arrow) is taken as a short entry, then a stop loss can be placed between 2 and 7 atrs ( atrs = average true range ) above the high price that occurs on the signal itself.
Horizontal red lines show suggested tight and wide stop distances and these are going to be fractal as decided by if you have plotted the indicator on a 15 minute chart or a weekly chart or something in the middle.

Naturally if you choose a tight stop of 2 atrs distance away you can expect to get stopped out on some trades which eventually do make a good move in the intended direction, and if you choose a wider stop of 5 to 7 atrs away then you have more chance to catch a larger amount of good winning trades. The down side is that you will have bigger losses on genuine losing signals, such parameters are best chosen by testing and observation.

Your choices are also going to be dependent on your own stomach for losses and patience.

It might interest you to note ( forgive me if it doesn't ) that I have never met a "tight trader" who made any decent money, as usually they are far to fast to move their stops way too tight to ever stand a chance of catching a big move. Truesay, they dont lose much either but generally they lose in a controlled and unspectacular manner.
On the other side of this personality range is the trader who cannot let himself take a loss and will keep making his stop wider and wider to thus avoid getting stopped out of his losing trade at least until he gets a margin call or his account is wiped out.

I hasten to add ( obviously ) that the best option is a personality type somewhere between these two types, and if you are somewhere in the middle of the above you have a better chance than most of making a living from trading.

Pi-Osc losing trade handling
 

 

 

 

 
 

Which markets can PI-OSC for MetaTrader 4 be used on?

  • Futures            
  • Stocks               
  • Bonds                
  • Forex     
  • Forex Futures   
  • ETFs
  • Any other markets with volume.

Which markets cannot be used with PI-OSC ?

  • Indices without volume
  • Any market with no volume

Does Pi-Osc work on any type of MetaTrader 4 charts?

  • Bars
  • Candles
  • Line
Precision Index Oscillator for MetaTrader conceptualized by Precision Trading systems
 
Pi-Osc has eight simple rules that must be observed to achieve the best results.

 

  • Rule 1: Wait for the bounce away from PI

  • Rule 2: Wait for the bounce away from PI

  • Rule 3: Wait for the bounce away from PI

  • Rule 4: Wait for the bounce away from PI

  • Rule 5: Trade in the direction of the major trend

  • Rule 6: Always use a well placed stop loss

  • Rule 7: Always use solid risk management

  • Rule 8: Remember and obey all the other  rules

 
 
 
 
 

 

FAQ for dummies

Question:

 

What is a pie bounce?

 

 

Answer:

 

See image ---->

Question:

 

What is a bounce away from PI?

 

 

 

Answer:

 

See image ---->

 

 

Question:

 

Does Pi-Osc work with line, candles and bars in MetaTrader?

 

 

Answer:

 

Yes it works it does. See image ---->

 

 

Its also clearly stated up above ^

 

Be careful, you might get a pie next time.

Question:

 

I

 

Answer:

 

You

 

Question:

 

I wonder if you can tell me the best timeframes to use Pi-Osc in? 

 

Answer:

 

That is a very good question. As with most systems and indicators reliability of signals is improved with increases in data sampling frequencies. 

 

However I have noted the charts of very slow time frame like 1 month dont tend to be very good, neither do very short term charts of 5 minutes or 1 minute.

 

E.G. A 15 minute chart would tend to give more reliable signals  than a 1 minute chart and a daily chart would tend to be more reliable than 4 hourly chart.

   The best course of action to take is to experiment by plotting the Pi-Osc on many different time frames until you find the one which works best.

 Looking for the holy grail? Its turns out to be a stopwatch ---->

 

Question:

 

Your FAQ for dummies is very funny!

Have you ever thought about offering a prize for the most stupid question?

 

Answer:

 

My research shows a bit of humour helps to encourage people to read carefully before asking me something which is already written clearly on the site here.

 

I award a pie to each question which is stated above, but please feel free to suggest an alternative prize. 

 

Even my dog can read, here he is studying Elliot wave theory----->

 

Question:

 

How do I install it?

 

Answer:

 

See above How to install Pi-Osc ?

 

 

 

 

 

Question:

 

What happens when my license expires? Are there any obligations to me?

 

 

Answer:

You will get a notification message showing the license has expired.

You may renew it at any time you like , but of course there is no obligation to do so.

 

 

Question:

 

Roger, Here are a couple of charts.  I have just three things to say WINNER, WINNER, WINNER and its giving better signals than the Tradestation version. I am like a kid in a candy store.

Regards Michael.

 

 

Answer: 

 

Happy customer pie screenshots are always welcome, thanks

   

Question:

Does your Pi-Osc work on NinjaTrader too?

 

Answer:

 

Yes,  I have a version for NinjaTrader7 and other platforms,

 please follow the links ------>

 

Pi-Osc for NinjaTrader7

Pi-Osc for MultiCharts

Pi-Osc for MetaTrader

Pi-Osc for Tradestation

<<<<<

Ho

 

 

 
 
 
 
 
Site to fix
1. Add metatrader logo to site and all links

Notes to fix

1. Plot width changes when changing time frames, need to correct it

2. Pi-Osc default plot widths and styles

plot 0 width 1 style 0

plot 1 width 2 style 0

plot 2 width 2 style 0

plot 3 width 1 style 2

plot 4 width 1 style 2