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  • #21
  • Jun 20, 2008 10:08am Jun 20, 2008 10:08am
also usd/chf and usd/jpy
  • #22
  • Jun 20, 2008 10:10am Jun 20, 2008 10:10am
sorry both h1 timeframe, both in profit but gonna close down soon, end of the week an all that
  • #23
  • Jun 20, 2008 11:04am Jun 20, 2008 11:04am
Quoting lesaurus
also usd/chf and usd/jpy

Yes those are good ones. I don't normally look at hour charts so i missed those. I look at 4 hr and daily. Paris
  • #24
  • Jun 20, 2008 12:01pm Jun 20, 2008 12:01pm
I think this is about the most profitable and consistent method here on forex factory. I've tried dozens of systems on this forum and i'd say the pin bars are about the best strategy. Paris
  • #25
  • Jun 20, 2008 12:42pm Jun 20, 2008 12:42pm
I'm pleased you think the same way paris.

I think that they are a great foundation to base a system off.

Plesae tell me more about how you trade, it sounds like you use higher timeframes and additional confirmation to enter?
  • #26
  • Jun 20, 2008 1:01pm Jun 20, 2008 1:01pm
lesaurus i will try to explain what ( i ) mean by cutting the losses short and let your profits run:
supposing you have a system that give you an average winner of 8 pips because you afraid to let your profits run to lets say 30 pips.on the other hand you set a stop loss of 20 pips and because you dont cut your losses it is hit almost always.
lets say that your system is very profitable (70 % winners)
now lets do the math:out of 100 trades you get 70 *8 pips=560pips profit
and 30 *20 pips=600pips loss
so you are overall -40 pips.(i dont talk here about the spread, the slippage or the commissions)
Thats why i say that the entries are not the ones that make the winners but the exits.
one last thing: to get money in every market you have to differ from the majority.overcome your FEAR and your GREED
just do me a favor:dont go live unless you understand all the above.
and never forget that we trade each other...have a nice weekend
  • #27
  • Jun 20, 2008 1:11pm Jun 20, 2008 1:11pm
I've just started learning how effective pin bars are, for a couple of months now. If the entire candle (wick) measures more than twice the body of the candle I consider it a very good pin bar. Then, it's great if it's bouncing off some type of support and resistance or breaking a trendline or bollinger band. Also if there is divergence of the indicators ,thats a very strong signal. You won't see it too often a divergence and pin bar, but when there is, it's very strong. All pin bars work more often than not. For exit you may look for a physcological level like 1.900 or 1.950 etc. or a reversal candle formation. It all depends on the situation. For mechanical strategy you can wait for the first 2 bars on opposite direction on a default MACD and exit then. Or take profit on the physcological level. I also put my stop loss about 5-10 pips below/above the wick. Paris
  • #28
  • Jun 20, 2008 1:15pm Jun 20, 2008 1:15pm
hey panos69 i sort of understand what your saying, i understand that a good risk to reward ratio is important, at least when associated with a poor win/loss ratio., but by what means do you determine what a winner is.

How do you decide when to let it run or take profit?

For instance i have just let my usd/jpy trade 'run' because I thought that it was a winner only to give back over 50% of it!

I am looking for hard rules, quantifiable methods, not just intuition.

Thanks for your comments and you too have a nice weekend, unfortunately its going to be raining all weekend here in England
  • #29
  • Jun 20, 2008 1:26pm Jun 20, 2008 1:26pm
a very simmple method is to never let a loss bigger than you average profit.
there will be good trades ,bad trades but most good traders are correct less than 50%.you call the shots,not the market.
set your system ,every system it doesnt matter.put your stop loss but as you demo it you ll get one day the feeling of what your average profit will be.
after that day never let your loss to get bigger than this number.
stop loss is there for another reason...usually good trades never go back more than 12 pips.
  • #30
  • Jun 20, 2008 4:49pm Jun 20, 2008 4:49pm
I saw this post, and thought I would comment on it. I am a senior member at J16, and as such, am intimately familiar with pinbars. My responses are in bold/blue.

Quoting lesaurus

BELIEFS

I have read a lot of information about pretty much everything here at FF and have tried to distill from it a few truths about forex (if there are any)

This is what i am left with.

The only thing that price seems to respect are significant levels, whether you call this support, resistance, PPZ's, previous highds/lows.

Price reacts to these but its pretty difficult to predict how, will it bounce or
break?

The above is true, as far as price respecting certain areas. The reason for this, in my humble opinion, could be places where larger institutions are interested in selling or buying. It is not my order, or yours. It will be Citibank, the ECB, or some other such large buyer/seller. I am correct in my theory? It's doesn't matter.....it is what it is.

One thing that got me into profit was to stop worrying about the WHY, but the WHAT. Meaning.....if pinbars in general work.....that's all that matters. Who cares why?

Also, why predict what will happen? Why not REACT to it? Much safer and smarter. (A lot less like gambling.)
Smaller time frames expose themselves more to the noise of forex and also the costs (spread) become more significant. On the other hand if this can be managed then scalping can have a number of benefits, mainly that of growing your account quicker.

True, and it will also increase your chances of getting burnt out. Or a stroke. We are trying to gain a better lifestyle through this. Or better yet - freedom. Freedom is NOT sitting at a computer screen 18 hours a day scalping the 15 minute chart. At that point - it becomes a quality of life issue.

Trends are great but they can and usually do end as soon as you join them.
Peope say let your winners run and cut losers short, how do you know a
winner?, you cant predict the future.

Get over that issue. No, we cannot predict the future. That is fear talking. However, we CAN predict the next move with the odds in our favor. It's called risk for a reason.

The weakest point of any method is human intervention or emotions, wether it be flexing your money management rules or 'knowing' were the price is going.
I think another word for 'discretion' is 'guessing'. If you can not quantify any part of your sytem it is basically guesswork.
Don't get me wrong, some traders are very good and cosistent guessers - im not.

That's fine. However, discretion is NOT guessing. In fact, discretion 99% of the time for me means NOT taking a trade. There is no chance of losing money when I am not in the market.

For example, I use discretion when I decide not to take a pinbar in EUR/USD at 8 a.m. EST, on a Non-Farm Payroll Friday. Most of the time, I find discretion keeps me OUT of trouble, not gets me into it. Do I miss a great trade every once in a while? You bet I do. That's life. And my life has more to it than trading.....so it happens.
The only way to win over time is to find an edge, stick to the rules which give you that edge, have belief in that system and then exploit it.

I believe that an edge is born through probability. If you can prove that
something happens more often than not, over an acceptably long period of
time, with accuracy then maybe, just maybe you may have found one.

I agree - however you put way too much thought into this. Price does one of two things.....goes up or down. It can go sideways, but only for so long.....trading should be easy. Thank God it is.

It us who make it hard.

System Theory.

O.k. so now you know where my mindset is i'm going to tell you how i'm trying to trade.

I say trying because this system needs considerable refinement.

What i want is your comments to see if its worth me pursuing this idea or not

I suppose this system is really an offspring from the James16 thread so much credit is due there.

It basically uses price action in the form of pinbars to trigger trades.

A pinbar shows price being rejected form a support resistance line.

James16 embraces this price action along with outside bars and double bar

high/lows with a lower/higher close, tries to weave in some other reasons to take the trade such as fib levels, moving averages etc. and then uses
discretion to make the trade.

I believe that this method works but am not convinced about certain aspects of it. Mainly the moving averages and the frequency of trades.

There are some of us, myself included, that NEVER use moving averages. In fact, I don't think it really helps one way or another. James and I disagree on that part of the system. But truth be told, my chart have nothing more than S/R lines. That's all I need.

However, make them the obvious, important ones. Weekly ones, daily ones. S/R lines on a 15 minute chart rarely mean anything.
I mean you can use any m.a. value you want from 1 to 1000, at some point
its going to look relevent to something. And man, i must be really impatient or something but trades are so infrequent on the daily timeframe that i cant
stand it, and it would take even longer to prove it.

You impatience will cost you money, and a lot of it if you are not careful.

Maybe this is a big weakness for me, maybe this method will gravitate to the longer tf's, but if there's any way possible of navigating the volatile waters of the H1 then id like to try. As i said earlier, scalping has its benefits

You seriously should start with weekly and daily. Trust me, after a couple of months of solid returns, you won't need the excitement of fast trades. However, if you can't do it on a daily chart, there's no way you will be able to do it on a 1 hour chart.

I think that the main thing that i don't like is the discretion side of it. i really
feel much more comfortable with quantifiable decisions, would i be any more
successfull trying to hand pick trades than i would trading everything that met my quantifiable parameters? This is what im trying to find out.

Beyond that discretion I mentioned earlier with massive news announcements coming out, discretion really isn't that big of a problem in my opinion. Remember, you never HAVE to be in the market.

As a general rule, I take every pinbar that is on S/R lines. Do they all work? No. But a majority of them do. That majority of them gives more than the others ones (losers) take. That's all you are trying to do....earn more than you lose.

Even if you only are up 10% for the year - you are doing better than 90% of the traders out there. You cannot put pressure on yourself to make 2% everyday, for example. Sometimes there just isn't anything worth getting involved in. Or other times, there is too much going on in our lives to care....

Remember: TRADE TO LIVE....NOT LIVE TO TRADE.
I hope this was helpful, as I was trying to be. I do wish you all the best of luck, and would say that there are several things in your posting that shows promise. You are on the right track, do not overcomplicate it. That's what I wish I did when I started. Who knows how much better off I would be?

Clockwork
  • #31
  • Jun 20, 2008 5:59pm Jun 20, 2008 5:59pm
Quoting lesaurus
How do you decide when to let it run or take profit?
Why don't you use trailing-stop? It won't be a problem if you have 24/7 Internet access.

As to how big is your trailing-stop, you have to check your manual backtest result. Look at every trade where price runs way over your target profit, find the biggest retracement, and set your trailing stop 1 or 2 pip over it.
  • #32
  • Jun 21, 2008 3:25am Jun 21, 2008 3:25am
This is going to be heresy... laff, but I've never had good results w/ pin bars. They don't accurately predict tops or bottoms. You'll get extremes that occur w/o them, and you'll get extremes that occur with them... that then keep on going. Look at all of the failed pin bars on the eurusd during the up trend, and look back thru various histories and you'll see pin bars that don't bounce... but just ride for a while.

They do work occasionally, and we can cite all sorts of qualifying reasons (oh it hit the magic point here and did this and then that and ooo, wow) and some may even be accurate, but it's so easy to cherry pick the best examples and ignore the bad ones that we get an over-inflated sense of accuracy about them... until we go to trade them, then it's pure frustration. I'm not sure how anyone can managed to trade w/ such a low hit percentage and a slow setup timeframe... one win per month just didn't work for me.

What I found worked better was getting to the core of what a pinbar really is. Next time you get one, zoom to a lower TF and you'll notice a head&shoulders pattern. What's happened is that a key resistance or support level was tested and failed, forcing a reversal. Once I realized that I started noticing the same patterns (R/S testing) in a lot of other bar patterns, doubles, triples, etc, and starting using entries that would capture both a test and a fail of that area.

Turns out there isn't any real magic behind these things. In the pits or in trading rooms across the world you get thousands of people thinking "price... next stop, 2.0!" then suddenly things slow down and bounce a bit and fail to move forward and people change their mind with "price 1.97!" and thus the drop begins.
  • #33
  • Jun 21, 2008 11:56am Jun 21, 2008 11:56am
Your comments are greatly appreciated and very interesting.

There are a couple of things that i would like to throw back if you don't mind.


Time frames.

I think the general consensus on the most part seems to be that smaller time frames are to be avoided.

I agree they are more difficult to deal with, and your win/loss ration will decrease due to noise stopping you out more often.

But let me put this to you:

Profitability over a given time period is a product of

Win/loss ratio X Risk/Reward ratio X number of trades in this period.

We strive to improve these factors to give us greater returns and to me the frequency of trades can be significantly increased by dropping time frames.

Moving from the D1 to H1 would produce approximately 6 times as many trades - That's by dropping just one time frame. Is the H4 that much more difficult to trade than the D1. I would like to know a way of increasing either of the other two variables sixfold.

Moving to the H1 =24 x
H30=48 x
H15=96 x
H5 = 288! x

I know the 5min chart may sound a little rediculous but is it?

I mean, there are levels of resistance in all timeframes, obviously varying in strength, but price action is price action just on different scales.

You still get pinbars on the 5min, just adjust the trade parameters accordingly. For example your take profit may only be a few pips, but as you know if this trade still adds 1% to your account, the same as the Daily, then there is no difference, apart from theres 288 more of them.

O.K, the risk reward will suffer and win/loss ratio as well but by how much?

I bet its not 288 times less. The most suprising thing is, from a quick visual back test the 5min timeframe actually improved on win/loss ratio.

I think the only way to really prove this is to complete some thorough backtesting, but my initial findings are very encouraging.


You say that working on the 5min is stressful, but does it need to be?
If you have a pretty much mechanical set of rules and an alert to help you avoid watching the screen, then its just a case of entering the trades as they come in.

In fact i think i would be less stressed worying about whether a trade on the 5min will work out, knowing that another will be along in a few minutes, than i would on a daily trade knowing that this may be my only chance this week of making some profit.

I know it comes down to personal choice at the end of the day and its what suits your lifestyle

It could be that trading Forex is just a mere hobby and 5mins a night perusing the dailys is all that you wish to do. but to me, i would like to make some money as a result of all this time i have invested and therefore I am willing to spend more time becoming profitable.


Discretion

I'd just like to touch on this.

You say that discretion is not guessing, and that it keeps you out of many loosing trades, but how many winners does it mean that you miss?

The point of my method is to eliminate discretion, work on probabilities only.

Days such as NFP fridays are unusual, but could be controlled quite easily by creating a rule that says 'do not trade on NFP days'. And anyway, what is the probability of the trade going for or against you? it's probably the same as any other, just on a bigger scale.

You mention fear but is discretion not fear? is it not standing on the sidelines because you think that its risky to trade?

This point links in with what RABID has just said

Quote

"This is going to be heresy... laff, but I've never had good results w/ pin bars. They don't accurately predict tops or bottoms. You'll get extremes that occur w/o them, and you'll get extremes that occur with them... that then keep on going. Look at all of the failed pin bars on the eurusd during the up trend, and look back thru various histories and you'll see pin bars that don't bounce... but just ride for a while."

This statement is very true, some pinbars sit at such beautifull points on the chart that it seems theres no way they will fail but they do and spectaculalry sometimes, and vice versa.

My point is that we can't really tell whether a pin will work or not, whatever reasons we like to use to qualify them, each one has just as much chance as working as the next and staying out of the market is really only down to a gut feeling or 'fear'.


Keep it simple

Quote

I agree - however you put way too much thought into this. Price does one of two things.....goes up or down. It can go sideways, but only for so long.....trading should be easy. Thank God it is.

It us who make it hard.


This is exactly why i am trying to eliminate discretion, to keep it simple.

I want to spend time doing the hard work of developing and testing a system, optimise it, set the rules and then finally be able to implement it without hesitation or thought.

I don't want to analyse every trade and employ discretion, wondering if i should enter or not, going round in circles for all different kinds of reasons.

I just want a signal and an entry every time, knowing that i've already done the work and set the rules. I want to use probability as my edge.

Finally Clockwork, I would like to say that, maybe you are right, maybe my theories are wrong, and time will prove this. I mean James16 has one of the most popular and probably successful threads on this forum.

I respect your comments and on the most part wholeheartedly agree, but just want to challenge a couple of aspects of this method that i feel could be explored a smidge further.


Please reply as I really look forward to hearing what you think to my ideas.

Yours respectfully

Paul.
  • #34
  • Edited Jun 22, 2008 1:59am Jun 21, 2008 12:38pm | Edited Jun 22, 2008 1:59am
Quoting lesaurus
Any way thanks for reading this and please comment, i would really love to hear your opinions and thoughts
Excellent post, Lesaurus, IMHO, and I agree with you on many points. I too believe that, with many traders, "discretion" is merely a euphemism for "lucky guesswork" [Clockwork71, I'm not targeting you, J16, or pin-bars – it's just a general, across-the-board comment]. Given the test of time, any method, whether "discretionary" or "mechanical", will either demonstrate a long-term edge or it won’t. As a long-time commercial analyst/programmer, I believe that an EA can ultimately coded to reflect any rational decision making process (details here: http://www.forexfactory.com/showthread.php?p=2005324). Ergo, those who say that "discretionary" traders have an advantage must mean either:
(1) vended EAs aren’t "intelligent" enough; or
(2) it’s any inaccuracy or irrationality in discretionary trading that provides its edge (which can only be utter nonsense, IMHO); or
(3) profitable EAs do exist, but they are not released into the public domain, at any price, for the most obvious of reasons.
To whatever extent human emotions and weakness are a barrier (depends on each individual), EAs are an obvious answer.

I agree that trading shorter time frames appears to offer significant benefits. Like a casino, high transaction volume will give any edge its maximum potential to shine through, accelerating the path toward statistical validity, and creating increased opportunities for compounding, and a smoother level of income. However, in the lower timeframes one is confronted with more noise ("randomness"), higher transaction costs relative to the moves being traded, greater opportunity for any surreptitious broker mischief, and of course (assuming manual trading) it’s a more labor-intensive process. IMHO, many traders underestimate the long-term effect of costs (however, costs can be alleviated by trading longer timeframes and only in the direction of positive swap).

I believe that with indicator-based systems, exit assumes greater importance by default, because indicators generally don’t provide accurate entries (more on this below). When exiting for profit, we basically have two choices: (1) use profit targets at points of likely reversal (e.g. S/R), and risk leaving pips on the table, if price decides to proceed through the S/R, or (2) use an ATR-based (or other) trailing stop, in which case we will forfeit pips on the retracement. Either way we are ultimately compromising win rate for win size (RR); for example, taking profit early will result in a high win rate, but curtail win size. Win rate and RR are inherently inversely proportional to each other, and exit adds to the probabilistic value of a trade only to the extent that it’s able to overcome this equilibrium. To explain with an example: everything else being equal, a 50 pip target is approximately twice as likely to be reached as a 100 pip target, where the doubled win rate compensates for the halved win size. Hence, unlike Panos69, I would argue that exits – or at least, profit exits – are largely unimportant.

I believe that successful entries depend broadly on three factors: (1) direction, (2) potential, and (3) momentum.

Direction is simply about entering long when prices are rising, and short when prices are falling. For added confirmation, wait until the high of the previous bar or pattern has been exceeded (a "breakout"), before entering a long trade; vice versa for a short trade.

Potential relates to the probability that you will catch a "decent" move. For example, if there are strong S/R areas just beyond the entry point, potential is reduced. By trading in the direction of the movement in the next higher wave(s), potential is increased, because the impulse waves are longer than the retracement waves (hence the maxim "trade with the trend"). OB/OS "extremes" create their own kind of potential, to whatever degree the assumption that price will correct itself back toward a point of equilibrium (its "fair value") holds good. To a certain extent, direction and potential counter-balance each other: for example, the longer a move has been in effect (confirmation of direction), the nearer it must be to its eventual reversal point (reduced potential). Hence entering a move later will, on balance, result overall in a higher win rate, but a lower win size, and vice versa.

With respect to trading a "trend", entering on a pullback increases "potential" but at the expense of "direction"; entering on a breakout vice versa. If I may continue talking in abstracts, then my preference is for breakouts, because "direction" is generally easier to determine than "potential". Moreover, with pullbacks there is a certain amount of guesswork in predicting how far price will pull back before the prevailing trend resumes.

However IMHO, the most important aspect to entry is momentum, i.e. the velocity at which price is moving. Given that volume (the "V" in OHLCV) in forex is essentially meaningless, the best momentum indicator we have is candle length. Long candles indicate high momentum, and can also give us clues as to possible underlying order flow. You will occasionally find long candles at the beginning of moves, where the big players are supposedly pushing price quickly, and also at the end of moves ("exhaustion") – especially in the 15/30/60 min timeframes. During strong moves, you will frequently see patterns of "sprint-stall-sprint" (large candles; then short candles, or spinning tops; then large candles); the "stall" areas supposedly represent profit-taking during the move. There are other very significant chart patterns like double tops/bottoms** and/or 1-2-3 patterns, where the big players may be striving to manipulate price level and/or attain liquidity to facilitate what they intend to be a big move (reversal). Chart-wise, these patterns depict a deceleration in movement, which in turn will likely show as oscillator (e.g. RSI, MACD) divergence.

[**Note: DBHLC/DBLHC (J16-speak) are effectively double tops/bottoms on lower timeframes].

So how does all of this relate to pin-bars? A "long-nose pin-bar beyond traffic" (J16 terminology) essentially means blatant rejection at an extreme OB/OS area (i.e. "potential"), and – even more importantly, IMHO – with "doubled momentum", since price has moved both ways within the same candle. Trading the pin-bar also means adherence to the "direction" maxim, i.e. one is entering in the direction of the emerging move. Hence these are all probable reasons why pin-bars occurring within a suitable context can offer high probability entries.

Other large candles like engulfing (outside bars) or railway tracks likewise at extremes, or areas of probable reversal (S/R, Fibos, etc) also represent high momentum at the start of, or during, a move, or – conversely – exhaustion at its end. Congestion (note: haramis or inside bars represent congestion on lower timeframes), from which breakouts result in long candles (momentum); of course it’s widely known that placing one’s stop at the opposite side of the congestion offers potentially high RR. In other words, congestion anticipates momentum.

As Rabid points out, many pin-bars "don’t work". In this instance they apparently represent profit-taking (a pullback) in a strong trend. In this context, keep in mind that all candles are merely summarizing price movement at arbitrary cut-off points (changing the cut-off point – e.g. from GMT+1 to GMT+2 on an H4 chart – can create a very different pattern, due to a different data set being collected for each candle).

Initial momentum is important because it somehow creates increased possibility for a sustained, rapid and/or "clean" (low noise) move. For a day trader it could signpost the day’s major move. [Of course, in all of this, we are talking in terms of (very fuzzy) probabilities, not certainties. The chaotic nature of price movement means that we must content ourselves with a small "edge", and hence apply conservative MM. In other words, no matter how disciplined a trader is, it’s impossible to profit indefinitely beyond whatever recurring elements of non-randomness might exist].

Prior S/R areas (PPZs in J16-speak), Fibo retracements, floor trader pivots, trendlines and round numbers (e.g. 1.9800) frequently create artificial areas where price stalls, and possibly reverses. Confluences (e.g. overlapping Fibos coinciding with prior S/R at a round number) can sometimes give good profit taking areas, but as pointed out earlier in this thread, operate more reliably on the higher time frames. I expect that this is largely due to the "self fulfilling prophecy" concept, i.e. many "influential" traders respect them, thereby creating the order flow necessary to motivate a reversal. My findings re moving averages (and indicators in general) are similar to Clockwork71’s, see my reasons here: http://www.forexfactory.com/showthread.php?p=1905256
Line studies, candle and chart patterns are less timeframe and parameter dependent than indicators and are therefore likely to be noticed and respected by a wider number of traders. Moreover, to whatever extent indicator-based entries are dependent on precise calibration, they are prone to over-optimization. Hence, while I wouldn’t rule out the possibility of profitable indicator based systems, I would suggest that line studies and patterns potentially offer more "robust" entries.

This is a long post. I will summarize quickly here by saying that to "let profits run" successfully we need to somehow catch moves that are prolonged enough to allow this. Carefully selected entries that somehow combine the elements of direction, potential and momentum can help – at least on balance of probability – to achieve this. We are under no compulsion to trade, hence provided that we can maintain patience, we can be as selective in our entries as we wish. I believe that this fact – exploiting whatever inefficiencies might exist in a largely chaotic process – ultimately provides us with the best edge that we can hope for.

David

[Edit] Footnote: I've included a couple of illustrative chart examples in post #36.
  • #35
  • Jun 21, 2008 12:55pm Jun 21, 2008 12:55pm
Could somebody please explain some abbreviations for me.
I've plotted Price_Action1.1 and I only know IB(Inside Bar) Pin Up and Down.
What is BuOVB, BeOVB , TBH, TBL MSL and MSH or DBHLC, DBLHC?
A little glossary with a short explanation would be nice.
  • #36
  • Edited 2:18pm Jun 21, 2008 2:03pm | Edited 2:18pm
I just "borrowed" these charts from a post by Smikester (http://www.forexfactory.com/showpost.php?p=2033578) and re-annotated them, to illustrate some of the points I was attempting to make back in post# 34.

It seems that these charts are the same pair/timeframe, but provided by brokers in different time zones. Hence my point about different cut-off points summarizing different data sets, and hence producing different candles. Note how the first chart provides a triple top, the second a double top. The first chart shows at least two ("failed") pin-bars, which don’t appear on the second chart. The second pin-bar instance gets absorbed into an engulfing candle on the second chart.

The most important feature on the chart for me is the big red candle following the high resistance (double/triple top). The momentum increases the likelihood of a decent move, giving a "let profits run" exit strategy full rein.

David
Attached Image (click to enlarge)
Click to Enlarge Name: examples1.JPG Size: 136 KB
  • #37
  • Edited 8:31pm Jun 21, 2008 2:51pm | Edited 8:31pm
Quoting Tjpld
Could somebody please explain some abbreviations for me.
I've plotted Price_Action1.1 and I only know IB(Inside Bar) Pin Up and Down.
What is BuOVB, BeOVB , TBH, TBL MSL and MSH or DBHLC, DBLHC?
A little glossary with a short explanation would be nice.
Tjpld, my knowledge of James16 is somewhat dated now.

This is as best as I can remember, perhaps Clockwork71 or somebody else could fill in the gaps:

BuOB: bullish outside bar = a bullish engulfing candle. Bar completely engulfs its predecessor, and closes higher than its open (and possibly higher than the high of the previous bar?). (Also, I'm not sure what the "V" means).

BeOB: bearish outside bar = a bearish engulfing candle. Bar completely engulfs its predecessor, and closes lower than its open (and possibly lower than the low of the previous bar?).

TBH: two-bar high? Oops, I can't remember.

TBL: two-bar low? Ditto.

DBLHC: double low, higher close. Two consecutive bars with approximately the same low, with the second bar's close > than it's open (and possibly > the high of the first bar?)

DBHLC: double high, lower close. Two consecutive bars with approximately the same high, with the second bar's close < than it's open (and possibly < the low of the first bar?)

Hopefully this gives you a starting point. Perhaps you can find examples on the charts that confirm this.

David
  • #38
  • Jun 21, 2008 2:54pm Jun 21, 2008 2:54pm
That makes sense!
You have been a great help. Thank you.
  • #39
  • Jun 21, 2008 3:12pm Jun 21, 2008 3:12pm
Since you are talking daily Pin Bars have a read through this thread. Might give you some ideas on how to tell the good from the bad without an indicator.
http://www.forexfactory.com/showthre...ghlight=ademac

Enjoy
Ademac
  • #40
  • Jun 22, 2008 12:57am Jun 22, 2008 12:57am
Quoting ademac
Since you are talking daily Pin Bars have a read through this thread. Might give you some ideas on how to tell the good from the bad without an indicator.
http://www.forexfactory.com/showthre...ghlight=ademac

Enjoy
Ademac
Interesting thread, Ademac, many thanks. Some good live chart-based examples and the two PDFs are a valuable read, IMHO.

The idea of waiting for a retracement following a pin-bar toward something approaching a double top provides an excellent low risk entry. If, for example, we can halve the risk (pips from entry to stoploss), then, everything else being equal, we double our eventual profit factor. The drawback of course being that we will likely miss some profitable moves, but, at least for me personally, I am happy to wait for the highest probability/RR trades.

Thanks again,
David
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