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.)
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.)
