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loudoniii Aug 21, 2018 3:25am | Post# 1

Pinpars Rock
 
PINBARS ROCK

Pinbars are dead easy to spot, and are a most reliable way to spot a good trade entry opportunity in my experience.

The pinbar is also known in candlestick parlance as a Hammer, for bullish entries, or Shooting Star / Inverted Hammer, for bearish entries.

I use 1-Hour or higher charts to spot potential entries, never lower timeframes.

A good long tail, with a small real body, is a prerequisite.

Entry

To enter, there are two basic approaches:

1. For long pinbars, seek to enter perhaps halfway into the Pinbar, on a re-trace.

This is cost-effective, but can mean losing a great trade if the retrace doesn't actually happen in practice.

2. Just go in directly on close of the pinbar.

This may cost you more in terms of Stop Loss, but means you don't miss potentially great trades waiting for a retrace that doesn't occur.

Stop Loss is always placed several PIPs beyond the tail of the pinbar.

Confidence in the entry is increased when you can see confluence with important S+R level(s), for example:

1. Key Fibo level, typically 50% or 76.4% retracements.

2. Significant Fibo extension level, eg 127.2% or 161.8%.

3. Notable S+R level created within the previous 24-48 hours trading.

4. BRN (Big Round Number) levels sometimes, eg x50, x00 levels.

Pinbar trades usually offer a very good Reward:Risk Ratio - I would seek a minimum 2:1, often 3:1 or better.

After the initial push away from the pinbar entry, you can often lock away your risk to break even quite early in the trade.

Managing your risk

Of course, by definition, pinbar trades are often counter-trend trades, going against the prevailing trend of the moment, so be fully aware of this before you enter.

If you want to minimise risk, choose only those pinbar entries that lead to a resumption of the trend after a retrace.

Exit

Just choose your own favourite approach, which could be one of the following:

1. A given Reward:Risk achievement, eg 3:1 or greater.

2. Key S+R level, eg 50% or 76.4% Fibo level.

3. Trailing Stop.

Here I'll post some examples of pinbar trades on 1-Hour or longer timeframe charts.

Please note that I trade primarily on Price Action alone.

(I can't deny also keeping half an eye on the 20 (Red) and 50 (Blue) EMAs, to see if they are telling me anything useful.)

loudoniii Aug 21, 2018 3:28am | Post# 2

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Perfect 1-Hour chart Pinbar / Shooting Star on the EJ this morning at 7:00 am BST, a reaction off the 161.8% Fibo extension of the previous rundown ... in profit already, with +1 PIP locked in.

Locking in early means I am risking getting knocked out on a retrace before the pinbar trade develops fully, but I reckon living to fight another day is never a bad approach.
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loudoniii Aug 21, 2018 3:39am | Post# 3

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When to exit this EJ short trade?

Conservative approach would maybe be to take it out around 126.56, confluence of previous S+R level and the 50% Fibo.

Alternatively, assuming you already have your risk locked away anyway, is to see if it wants to run all the way to the 76.4% Fibo at 126.31.

News? Only some medium impact GBP-related stuff at 9:30 am BST, which I would not expect to shake the EJ much.

Post Script

Turns out that the counter-trend drop off the pinbar didn't go that far, although there were 23 PIPs you could have made out of this trade if you'd got in at the close of the pinbar and got out at the bottom.

In my case, my trade came out on its stop loss of break even +1 PIP. One lives to fight another day!

If you are risk-averse, avoid counter-trend trades such as this one.

Instead, wait for the retrace to complete and use pinbar entries to get back in to a prevailing trend.
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TheRealTruth Aug 21, 2018 5:37am | Post# 4

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It's better to wait for pin bars with opposite color of previous bar
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loudoniii Aug 21, 2018 7:05am | Post# 5

It's better to wait for pin bars with opposite color of previous bar {image}
Good point! Although the 14 August pinbar on your chart worked pretty well, and it is the same colour - green - as the preceding bar.

Your example shows how well pinbars can work on longer-term charts, such as 4-Hour and Daily charts.

bulltrader13 Aug 21, 2018 7:05am | Post# 6

Thanks for thread loudoniii, just spotted nice one on the dax and ok one on the USD CAD

loudoniii Aug 21, 2018 7:09am | Post# 7

Thanks for thread loudoniii, just spotted nice one on the dax and ok one on the USD CAD
Cool. On which timeframe did you see the pinbar on the USD/CAD - I can't see it on the 1-Hour

The 11:00 am BST 1-Hour candle on the USD/CAD has a rather fat real body, and its tail is definitely not at least 3 times the length of the real body.

So I personally wouldn't class it as a pinbar really, though price does seem to be reversing there at the moment!

It's been a pretty dull trading morning here in London, so I'm hoping for a bit more life once New York opens at 13:00 BST (08:00 EST).

bulltrader13 Aug 21, 2018 7:19am | Post# 8

{quote} Cool. On which timeframe did you see the pinbar on the USD/CAD - I can't see it on the 1-Hour The 11:00 am BST 1-Hour candle on the USD/CAD has a rather fat real body, and its tail is definitely not at least 3 times the length of the real body. So I personally wouldn't class it as a pinbar really, though price does seem to be reversing there at the moment! It's been a pretty dull trading morning here in London, so I'm hoping for a bit more life once New York opens at 13:00 BST (08:00 EST).
Yeah CAD one not looking good when zooming in, but Im in the DAX one still. Im also using londin time on IG

KeenPips Aug 21, 2018 7:40am | Post# 9

Agreed, pin bars at confluence areas usually work well. But they work far better when traded in the direction of the main trend.

Trade safe and prosper.

KP

loudoniii Aug 21, 2018 8:42am | Post# 10

Agreed, pin bars at confluence areas usually work well. But they work far better when traded in the direction of the main trend. Trade safe and prosper. KP
Sure, re-entering in the direction of the underlying main trend - after a retracement - makes for safer trading, as you say!

KeenPips Aug 21, 2018 8:49am | Post# 11

I am happy that we have this understanding on this thread. It's a good thread and it can be interesting to see how traders fare with how they use pin bars. Personally, I like a retracement to the 50/62 Fib area/band. I don't mind missing any market move as I love a high reward--to-risk ratio.

Trade safe and prosper.

KP

{quote} Sure, re-entering in the direction of the underlying main trend - after a retracement - makes for safer trading, as you say!

KeenPips Aug 21, 2018 8:54am | Post# 12

Another point will be using a two time-frame approach with a limit order. You use the higher tf for the setup and enter the trade on a lower tf.

KP

I am happy that we have this understanding on this thread. It's a good thread and it can be interesting to see how traders fare with how they use pin bars. Personally, I like a retracement to the 50/62 Fib area/band. I don't mind missing any market move as I love a high reward--to-risk ratio. Trade safe and prosper. KP {quote}

Erebus Aug 21, 2018 9:27am | Post# 13

This thread here had a pretty good indicator for a special type of Pin Bar

I'll check if it still works

https://www.forexfactory.com/showthr...6#post10388996

loudoniii Aug 21, 2018 9:57am | Post# 14

This thread here had a pretty good indicator for a special type of Pin Bar I'll check if it still works https://www.forexfactory.com/showthr...6#post10388996
Thanks a lot, Erebus .. I'll go check it out.

DonPato Aug 21, 2018 3:12pm | Post# 15

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...Post Script Turns out that the counter-trend drop off the pinbar didn't go that far, although there were 23 PIPs you could have made out of this trade if you'd got in at the close of the pinbar and got out at the bottom. In my case, my trade came out on its stop loss of break even +1 PIP. One lives to fight another day! If you are risk-averse, avoid counter-trend trades such as this one. Instead, wait for the retrace to complete and use pinbar entries to get back in to a prevailing trend. {image}
If you really want to use "pin bars" you would do well to observe and engage ONLY on those pin bars that occur on RISING tick volume. This will indicate the order flow has truly changed and will most likely result in a reversal. It is best if this is seen after a volume climax and exhaustion phase as well, but at least this simple rule would've saved you from this loss...or put you into the long at (or near) the bottom.

Low volume (or falling volume) pin bars (in reality the one at the top is a "shooting star" and the one at the bottom is a "hammer") indicates just simple lack in interest in continuation of the move (up or down)...however if you are looking for the reversal, you will need to see that same bar on RISING volume showing that to spite all the selling, the bar finished well off the lows...and a buyers are absorbing that selling.
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Best of luck

Erebus Aug 21, 2018 8:56pm | Post# 16

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{quote} Thanks a lot, Erebus .. I'll go check it out.
Here we can see it picked up the example from Post 2, hope you got out breakeven at least

The number is the bars since price at that level

Which is no guarantee of anything but an interesting statistic

Can you fix the title of the thread or need Admin to help?

Good luck all

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Erebus Aug 21, 2018 9:19pm | Post# 17

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Here is an awesome, hand picked, best case scenario

The Risk : Rewards on the Fibo extensions are from high to low readings

Obviously, an entry at 50% will give double those results

Good luck all, let's do it

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Erebus Aug 21, 2018 9:36pm | Post# 18

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Sorry if this is boring you, just don't read if it does

This also offered a 50% entry

The breakout entry gave 250 pips originally; we can only dream of the 1,000 pipper

That would make your trading year, especially with add on entries

Good luck all

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Re-L Aug 22, 2018 6:36am | Post# 19

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After searching Google to see if there is anyone else who trades with pins and fibo extensions, I found this thread and I'm glad I did

How do you draw the fibo extension?

Everywhere I see people draw it between the latest swing high and low but I use it a bit differently. When I see a swing high or low, I start drawing a fibo extension, aligning the %23.6 extension with the first pullback after the swing low/high. Sometimes price behaves so well aligning to fibo retracement levels, you feel like you can predict the future. Also I only enter in the general direction of the price.

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Erebus Aug 22, 2018 6:52am | Post# 20

After searching Google to see if there is anyone else who trades with pins and fibo extensions, I found this thread and I'm glad I did How do you draw the fibo extension? Everywhere I see people draw it between the latest swing high and low but I use it a bit differently. When I see a swing high or low, I start drawing a fibo extension, aligning the %23.6 extension with the first pullback after the swing low/high. Sometimes price behaves so well aligning to fibo retracement levels, you feel like you can predict the future. Also I only enter...
In those examples, I just put Fib on 1 candle, so High to Low, see the 50% retracement, extensions are normal, 1, 2, 3 to give equal pips

What is that tool you show there, if that is Metatrader, must be a special custom indicator

Cheers


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