Inside the candle

I will talk about something that has been discussed many times and in many different forms.

James16 talks about finding a nice looking market on higher timeframes, and "fine tuning" his entry. I'm sure many others talk about the same thing.

Here's what I do. I try to "get a jump" on a daily pin bar (or doji) before it closes. If there is a pin bar on the hourly, and a strong move in the opposite direction on the hourly, I will gamble that it is a daily pin in the making.

Of course this is only my own approach. The same can be done with other PA strategies. I just try to catch a substantial move early in candlestick, and hope for the best.

This is interesting. If we look at the last 3 days candle on GU, it is all a doji/hammer like candles that were preceded by a similar candle patterns. Take a look at the chart at the check mark areas

Lots of false positives in that graph.

I would want

1) a very long wick
2) a very strong move in the opposite direction after the wick


Thank you for the graph.

Hello tdion, can you post some chart? A pic is worth thousands words

Using the second check mark on arhemsi's chart:

I would like to have seen price quickly rise above the last recent high 8 or 9 candles back.. It would take a strong move for that to happen before the current daily candle closed.

It actually happened on the first checked candle, even though it failed. The second bounce would have been more convincing to me if it had followed through a little further. I'm basing that on the second checked pin making a higher low than the first.

This type of early entry flies in the face of "waiting for confirmation", etc. But there are reasons for doing it.
A) If you like to quickly take a piece off your trade to put yourself in a free ride situation, this may see you to that end.
B) Your entry will be closer to your stop, which will likely be below the pin, no matter where you enter.

It's a little refreshing to be using examples on a chart we know will fail us. We can't be accused of cherry picking and trading hindsight.