Forex "Pin" Bars

[lurkerlurker]

GOLD pin at 10AM. Now several pips in profit. Did anyone catch that one? (my alert service did)

 

[shortorlong]

Yet another one is forming too. However, that one doesn't look quite right either!

You could still get an entry into the YM pin if you felt like it....

I'm not seeing a pin on the Dow .. that's with CMC and with Capital Spreads charts though.

I see the one on gold .. too late now.. .. truth is I was up so late last nigh I fell asleep at the wheel this morning

 

[lurkerlurker]

Usd/jpy Bearish Hourly

This pin is off the top resistance channel of the previous few days, and marks a rejection of the highs above the pre-payroll chart.

Also, we have a perfect combination of USD weakness (against GBP and CAD) with JPY strength (against GBP and EUR). Should be a good trade.

 

[lurkerlurker]

GOLD also makes a reverse pin off support. Not a great signal as it doesn't poke out.

 

[trader_dante]

GOLD pin at 10AM. Now several pips in profit. Did anyone catch that one? (my alert service did)

Tom this is not a good pin! It has a very short nose and it marks only a very MINOR s/r pivot.

While I think this thread is a good idea I hope that people don't read my thread and get carried away thinking that every pin is going to work.

You have to be very, very discerning when you trade these bars.

 

[shortorlong]

Splitlink posted about an hourly pin on the FTSE ..I see it too .. but the left eye does not line up .. and I don't see any confluence of SR .. but may be missing it

anyway I am short .. edit: and it doesn't look that great right now

 

[trader_dante]

This pin is off the top resistance channel of the previous few days, and marks a rejection of the highs above the pre-payroll chart.

Also, we have a perfect combination of USD weakness (against GBP and CAD) with JPY strength (against GBP and EUR). Should be a good trade.

Not a pin on my chart...the body is way outside the range of the preceeding bar...

 

[lurkerlurker]

Tom this is not a good pin! It has a very short nose and it marks only a very MINOR s/r pivot.

While I think this thread is a good idea I hope that people don't read my thread and get carried away thinking that every pin is going to work.

You have to be very, very discerning when you trade these bars.

True. Thanks for pointing that out. I'll be more discerning with my posts. I think the idea is just to alert other traders to possible[ setups....

Nice to have your contributions though. What do you really think of the USD/JPY "pin" - it is almost a pin - these don't always work to the tick. It is off an important level. Personally I wouldn't risk money on it.

 

[trader_dante]

True. Thanks for pointing that out. I'll be more discerning with my posts. I think the idea is just to alert other traders to possible[ setups....

Nice to have your contributions though. What do you really think of the USD/JPY "pin" - it is almost a pin - these don't always work to the tick. It is off an important level. Personally I wouldn't risk money on it.

When I look at a setup like USD/JPY, I think "that might be worth a punt". Which invariably means I won't take it.

Right now I am taking the setups that are crying out to be taken.

For new traders it is hard to advise them to be discerning because they don't have the experience yet to know what works and what doesn't. Although I can advise them, they ultimately need to find out for themselves by trading very small size with money they can afford to lose or trading on demo.

For more experienced traders, I would advise them to ask themselves how certain they are that the market is going to move in their direction.

If you had absolutely no money in your account - would you borrow money to trade this setup? How much risk would you take on this trade? What if you were told you HAD to risk 20% of your account on each trade. Try imagining it. You will be amazed at how discerning it makes you.

There are times when the market literally cries out to be traded.

This one simply doesn't speak to me with that urgency.

 

[tune]

Tom this is not a good pin! It has a very short nose and it marks only a very MINOR s/r pivot.

While I think this thread is a good idea I hope that people don't read my thread and get carried away thinking that every pin is going to work.

You have to be very, very discerning when you trade these bars.

I think I see what you mean. Shorting into the range after a breakout might not be the best way of using a "pin".

 

[TheBramble]

JPY is strong at the moment which means short potential (especially on GBPJPY) and there is a danger of trying to 'fit' mechanics and technicals to our expectations.

TD is right - if you're going to use Pinbars as an entry signal, make sure they're Grade AAA. Expect in any given day to be 'offered' a bunch of signals. Only a handful of them will be worth your greater attention. And of those, maybe just one or two are the real gems. Nothing but the best will do.

 

[rols]

TD is right - if you're going to use Pinbars as an entry signal, make sure they're Grade AAA. Expect in any given day to be 'offered' a bunch of signals. Only a handful of them will be worth your greater attention. And of those, maybe just one or two are the real gems. Nothing but the best will do.

Trading pin bars and sticking the pin on the donkey are both easy...

.... in hindsight and without the blindfold.

 

[lurkerlurker]

When I look at a setup like USD/JPY, I think "that might be worth a punt". Which invariably means I won't take it.

Right now I am taking the setups that are crying out to be taken.

For new traders it is hard to advise them to be discerning because they don't have the experience yet to know what works and what doesn't. Although I can advise them, they ultimately need to find out for themselves by trading very small size with money they can afford to lose or trading on demo.

For more experienced traders, I would advise them to ask themselves how certain they are that the market is going to move in their direction.

If you had absolutely no money in your account - would you borrow money to trade this setup? How much risk would you take on this trade? What if you were told you HAD to risk 20% of your account on each trade. Try imagining it. You will be amazed at how discerning it makes you.

There are times when the market literally cries out to be traded.

This one simply doesn't speak to me with that urgency.

A somewhat poetic discription, but I hear you. The trade is in profit now, but who knows whether it would work out as a good trade. Irrelevant really because all we have is the setup the market gives us - we can never predict a trade so even if a few "B" pins work out, it does not mean we should consider B pins.

I also stayed out of this trade. I'm having a break for a week, but this isn't a short I would have taken anyway - although I would have come pretty close to placing the order given the price action, USD weakness, and JPY strength vs other pairs.

 

[lurkerlurker]

Definitions

In order to avoid too many bad pins being posted, or confusion about the setup, perhaps it would be helpful if we have a clear definition of the setup - ie members know to only post conforming pins on this thread.

TD - since you are the resident pin bar expert over here on T2W, I'd be grateful if you could provide such definition, and I'll edit my first post to include it.

 

[lurkerlurker]

I think I see what you mean. Shorting into the range after a breakout might not be the best way of using a "pin".

Which makes it extremely important to be aware of classical TA in addition to the pin bar setups.

 

[shortorlong]

Splitlink posted about an hourly pin on the FTSE ..I see it too .. but the left eye does not line up .. and I don't see any confluence of SR .. but may be missing it

anyway I am short .. edit: and it doesn't look that great right now

geees ..I'm losing the will to live here
scratching this trade in ...

 

[trader_dante]

In order to avoid too many bad pins being posted, or confusion about the setup, perhaps it would be helpful if we have a clear definition of the setup - ie members know to only post conforming pins on this thread.

TD - since you are the resident pin bar expert over here on T2W, I'd be grateful if you could provide such definition, and I'll edit my first post to include it.

Hi Lurker,

Try this post: http://www.trade2win.com/boards/379628-post1116.html

 

[JTrader]

An inconvenient truth??

My trouble with pin bars is the subjective naturew of definging a pin bar .
There surely comes a point at which it is a pin bar, and with a 1 pip smaller wick on the top or bottom of the candle, it is not a pin-bar.
Pin-bars are therefore easy to cherry-pick in hindsight, conveniently ignoring the inconvenient failing bars/candles when posting a historical chart that may also have been defined as pin-bars.

 

[lurkerlurker]

Definition

In the second part of this mini-series I am going to discuss the discretionary element in pin bar trading.

This is something that has been covered in detail throughout this thread. I will merely summarise it here.

A good pin bar should:

- Have a long nose in proportion to its body
- Have its body in the top or bottom third of the range
- Have its close within the range of the previous bar and near to its high or low

See Chart 1 for an example of a pin that meets this criteria.

Pin bars can be played in both TRENDING and SIDEWAYS markets but they should ALWAYS be played at SWING HIGHS or SWING LOWS in both types of markets.

The SWING is THE single most important element for me.

In a TRENDING market a pin can appear at:

a) The end of a SWING as an exhaustion move. Many times when this happens there will be no other supporting factors.
b) The end of a NATURAL REACTION in a trend to indicate that the move is about to resume.

In a SIDEWAYS market the pin should SWING into the support or resistance (see chart 2) it should not DRIFT into it (as it does in chart 3).

I like to see pins appearing at support or resistance, pivotal points where support becomes resistance and vice versa, key fib levels or EMAs. Areas of confluence, which are areas where several levels come together, are particularly powerful. There have been many examples throughout this thread of both these individual elements and confluence.

I play pin bars both WITH and AGAINST the trend and I rarely worry about the size of the stop. It is all relative. The weekly pin that appeared at a swing high in November on GBP/USD had a range of 379 pips but even after the rally of the last two days it is still 823 pips in profit. (see chart 4) That is still well over 2:1 reward/risk.

It always baffles me when people say that they wouldn't take something because the stop would be too large. The only reason I would pass on a large stop is if I could not take it on MINIMUM size and still adhere to my risk management.

The discretionary element in trading pin bars comes from experience. The pin in the last example (weekly Cable) DOES NOT have its close within the previous range. As a result it does not meet ALL my criteria. However, IF I had been able to take it at minimum size, I still would have done. It is times like this when a trader has to make a decision based on their previous observations of the market.

 

[shortorlong]

geees ..I'm losing the will to live here
scratching this trade in ...

see attached, the pin I acted on, not a great pin, and I did not follow procedure, I gambled and any second now .. I will close for zero .. maybe worse. I don't want to be in a trade when the US opens, and I have other stuff to do right now.

closed for one lousy point .. oh well .. serves me right .. I had to run out of luck at some point.