My understanding is that pin bars tend to work profitably, on balance, because they depict a price movement in one direction (from the “eyes” to “nose-end”), and then followed by a reverse movement from the “nose-end” back to the “eyes”, all within the same price bar. This sudden reversal in momentum frequently points to the start of trend change. I understand from Jim’s comments that this principle apparently works more reliably in the longer timeframes (H1 upwards).
One of the problems is that the longer the timeframe (e.g. H4, D1, W1), the less often pin bars occur, hence trading opportunities are restricted. I’ve often wondered: what if MT4 could produce H2, H3, H6, H8, D2, D3, etc charts – would pin bars be valid (i.e. tradable profitably) in these timeframes? Given their underlying principle (sharp momentum reversal), I suspect that they would. (We could further extend this concept if we could have MT4 plot H4 bars starting at “staggered” hours – 1:00, 2:00, 3:00, 5:00, etc). The end result of all this would be the generation of a lot more pin bars, DBHLC, BUOB, IB4, etc, etc, potentially creating a vast number of additional opportunities for entry.
Fibo confluence would remain unaffected, since Fibos are drawn from "absolute" local highs and lows, which (unlike other indys, e.g. Bollinger bands) are unaffected by shifts in timeframe.
And what about inter-bar confluence, e.g. if, “drilling down” from an H8 pin bar, we find it contains a component BEOB at the H2 level? Does this enhance the probability of a profitable entry?
Anyway, I recently discovered an indicator which allows additional timeframes to be plotted, albeit “offline”. I managed to get it to generate H2 and H3 charts successfully on my Win XP-based config here.
To download the indicator, and for set-up instructions, see: http://codebase.mql4.com/indicators/277
I’m not sure if my idea has any merit. I leave it for you folk to experiment and discuss.
Cheers
David
One of the problems is that the longer the timeframe (e.g. H4, D1, W1), the less often pin bars occur, hence trading opportunities are restricted. I’ve often wondered: what if MT4 could produce H2, H3, H6, H8, D2, D3, etc charts – would pin bars be valid (i.e. tradable profitably) in these timeframes? Given their underlying principle (sharp momentum reversal), I suspect that they would. (We could further extend this concept if we could have MT4 plot H4 bars starting at “staggered” hours – 1:00, 2:00, 3:00, 5:00, etc). The end result of all this would be the generation of a lot more pin bars, DBHLC, BUOB, IB4, etc, etc, potentially creating a vast number of additional opportunities for entry.
Fibo confluence would remain unaffected, since Fibos are drawn from "absolute" local highs and lows, which (unlike other indys, e.g. Bollinger bands) are unaffected by shifts in timeframe.
And what about inter-bar confluence, e.g. if, “drilling down” from an H8 pin bar, we find it contains a component BEOB at the H2 level? Does this enhance the probability of a profitable entry?
Anyway, I recently discovered an indicator which allows additional timeframes to be plotted, albeit “offline”. I managed to get it to generate H2 and H3 charts successfully on my Win XP-based config here.
To download the indicator, and for set-up instructions, see: http://codebase.mql4.com/indicators/277
I’m not sure if my idea has any merit. I leave it for you folk to experiment and discuss.
Cheers
David
