Forex "Pin" Bars

[Ljr]

Apologies lads - got caught watching a DVD, so no pin-bar investigations....

I'll do a bit tomorrow, I promise!

Had a quick look myself but didn't spot anything obvious, although there have been a couple over the last few days. Will also look in more detail tomorrow.

 

[VinceStanzione]

Had a quick look myself but didn't spot anything obvious, although there have been a couple over the last few days. Will also look in more detail tomorrow.

Cheers Ljr - once there's a few of us keeping our eye in, we should be fine.

In particular, I'm looking forward to all of us comparing notes on how we'll play these pin-bars.

"May you live in interesting times...."

Happy Hunting,
VS

 

[Crap Buddist]

Hello Barclays.... yeah you got that forex on Sky + so I can pause it ? hello, hello.

Apologies lads - got caught watching a DVD, so no pin-bar investigations....

I'll do a bit tomorrow, I promise!

Vince are you taking the P1ss ?

 

[VinceStanzione]

CB,

Unfortunately, I'm not afraid.

"Herself" didn't give me an option...

"What's that you say? I'm pussy-whipped??..." lol

The Sky + aint a bad idea!!

 

[Ljr]

Look at Gold on the hourly at 08h00. Looks like the nose touched some previous support points. Haven't done much more investigation yet. Any comments?

 

[eltrot1979]

Hi. First post on these forums, and on trading, so don't be too harsh!

Pinbar EURJPY H1, entry 156.61, stoploss 157.02, not sure about exit target.

This occurred a couple of bars ago and it did initially break but has now moved above the entry. Still scope to get in I guess. Thoughts?

Rob

Moved stop to 156.26 at about 8:30 this morning when current price was around 155.90. I was hoping it would hold below 156.00 but by the time I'd got to work the price had reversed and hit my stop. If only I'd closed this morning I could have had around 70 pips! Oh well, still made 35 pips on this. Any comments on management of the trade welcome!

 

[VinceStanzione]

Ljr, Eltrot,

I'll have a look at your trades after work.

Good to see we're building some momentum on this thread.

 

[VinceStanzione]

Look at Gold on the hourly at 08h00. Looks like the nose touched some previous support points. Haven't done much more investigation yet. Any comments?

Hiya Ljr,

From looking at the 08.00am pinbar on the 1HR Gold market, it doesn't - at a first glance - appear to me to be a particularly strong pinbar.

As such, I haven't applied the rules in the pinbar spreadsheet to validate this potential pin.

I have drawn a horizontal line at 901.39; although there's some evidence of support at this level, I don't see resistence occuring frequently enough in the circa 2 months of data on my hourly chart.

In addition, the pin-bars immediately preceeding it in a 5/6 hour window are whip-sawing back and forth. Now, I'm not sure when the Gold market does open - & anyone reading, please feel free to highlight the actual time (& market locatino ie London, NY, etc) - so this may indicate reasons for uncertainty (ie if the market opens 8am GMT).

So at this stage, I am going to pass on this pinbar.

Now, I now that you made 35 pips on this trade - and I'm not for one second knocking this!!.

However, our goal as traders is only to risk capital when we are 100% sure that:-

- we have a high probability set-up;

- a highly favourable R:R ratio; and

- the prospect of significant upside potential.

As stated above, the lack - in my opinion - of sufficent upside potential (or in this case, downside, in this short trade) & the evidence of support at 901.39 means I would pass.

Just my $0.02!!

However, we're not finished yet - see next post...

 

[VinceStanzione]

Gold 1HR - Potential Pin Bar #1

There's a potential bullish pinbar at 10am this morning in this market.

Firstly, let's use the pinbar workbook.xls to see if it satisfies the strict criteria for pin-bar status:-

O = 900.55
H = 901.05
L = 896.30
C = 900.15

=> Range = 901.05 - 896.30 = 4.75
=> Body = 900.55 - 900.15 = 0.40

- Does it have a long nose in proportion to its body? Yes

- Does it have its body in the top or bottom third of the range? 1/3rd of the range is 1.58

=> 901.05 - 1.58 = 899.47; O & C above this => criteria satisfied.

Does it have its close within the range of the previous bar and near to its high or low?

Close is within range of previous bar; however, it's not near it's high/low.

- Swing low? Yes

- S/R pivot? Drawing a horizontal line at 896.64 gives several support & resistance signals => I believe this line (or around this line) is a significant S/R pivot. NB!!

Fib Level? confluence with the S/R pivot of 896.64 at the 50 fib when the fib is drawn from 2008.02.06 10.00am swing low to swing high at 17.00 on the same day.

OK, I would have had sufficent evidence to take this on.

In terms of a target, resistance at 905.74 looks evident from the chart; It'd look to enter one pip above our bullish PB ie at 901.06, giving us a target of 4.69 (cf 4.75 at risk), giving us nearly 1:1 in terms of risk & reward.

Using a stop management approach of: moving the stop to one pip below the next pin-bar (and the next one, etc, etc) =>

Gets us stopped out approx 3 hours later at 902.48 ($1.42 above where we entered).

The natural responses is: "Ah, that's easy in hindsight VS!!!"

And you right, it is!!

However, it's only when I added the 10,21 & so EMAs that I realised that huge profits had gone astray...

Price moved between the 10 & 21 EMA at approx. midday. The 10 & 21's subsequently begin to converge - and then bang!! - price break-out to 909.00 at 6pm this evening.

It hit 910.50 the following hour....

Now guys, if anyone reading this still doubts T_D's methods....there's no helping them!!

TBC....

 

[VinceStanzione]

Guys, feedback on the above is greatly, greatly appreciated.

If you think the above is either:-

crap, woeful, average, incredible (!!)...then please, let me know what you think.

The goal on these threads is for EVERYONE to learn - T_D has shown us the 'how'; it's up to us to bring the desire to consistency earn pips & profits.

Cheers Lad,
VS

 

[Ljr]

Hi Vince S

Thanks for your replies, although I am a bit confused. Firstly I didn't take the Gold trade. i just spotted it this morning. It was Eltrot1979 that made 35 pips on the EURJPY trade.
Could you possibly post a screen shot of the analysis you have done above on Gold as on my charts the 08h00 Pin looks quite good and Gold rose quite nicely during the day with a dip mid afternoon but then continued to a high of around 911 where another Pin formed where one may have got out with about 10 pips profit.

The figures you state in your second post don't add up to what I am seeing on my charts. This Pin didn't look particularly good to me as it doesn't stick out above some of the bars a couple of hours before. Also surely the 10h00 Pin is a bearish Pin as it is sticking up indicating the price could drop.

Maybe we are not looking at the same info, however I really do appreciate the analysis you have done and it is very methodical.

Leon

 

[VinceStanzione]

Potential PinBar #2 (Gold 1HR, 7pm this evening)

Ok, here we go again...

I'm going to skip the mechancial test of this pinbar using the spreadsheet above - we can all follow the method & moreover, it's very time-consuming to type out!

However, visually the pin looks good; body in the lower third, in proportion to a very long nose that pokes out significantly above the previous bar's high.

In addition, we're looking at a potential swing high.


So, let's draw a straight line @ 911.42. There is significant resistance from before 22.00on the 7th Feb to circa 04.00 the following morning => resistance criteria satisfied.

But is this level a support also?

Well look at the end of the two bars at 13.00 & 14.00 on the 08 Feb, in addition to 12 Feb at 18.00.

Looks like support to me.

More importantly, looks like circa 911.4 is a reliable S/R PIVOT

How does this look in relation to this potential bearish pin at 7pm tonight??

The top of the nose is approx $0.60 off the level of our S/R.

Given the high of this bearish pinbar is 91080 cents, a difference on circa 60 is ok for me.

OK, so we have a potential pin bar that looks good (visually); we have a competent S/R line....how are the Fibs looking?

Well, drawing fibs (from left to right), from the major swing high @ 2008.02.11 at 14.00 down to the major swing low earlier today at 10.00 (as discussed a couple of points back) => gives us a fib at 50.0 extremely close to 911.40.

=> I'm sufficently happy to enter a short order at: 906.29 (ie just below our 7pm pin bar).

Stop will be at the high of the 7pm pin (ie at 910.81); giving us a total range of $4.53.

We now need to define our R:R - so lets look for potential price support levels which may stop us out...

TBC....

 

[eltrot1979]

There's a potential bullish pinbar at 10am this morning in this market.

Firstly, let's use the pinbar workbook.xls to see if it satisfies the strict criteria for pin-bar status:-

O = 900.55
H = 901.05
L = 896.30
C = 900.15

=> Range = 901.05 - 896.30 = 4.75
=> Body = 900.55 - 900.15 = 0.40

- Does it have a long nose in proportion to its body? Yes

- Does it have its body in the top or bottom third of the range? 1/3rd of the range is 1.58

=> 901.05 - 1.58 = 899.47; O & C above this => criteria satisfied.

Does it have its close within the range of the previous bar and near to its high or low?

Close is within range of previous bar; however, it's not near it's high/low.

- Swing low? Yes

- S/R pivot? Drawing a horizontal line at 896.64 gives several support & resistance signals => I believe this line (or around this line) is a significant S/R pivot. NB!!

Fib Level? confluence with the S/R pivot of 896.64 at the 50 fib when the fib is drawn from 2008.02.06 10.00am swing low to swing high at 17.00 on the same day.

OK, I would have had sufficent evidence to take this on.

In terms of a target, resistance at 905.74 looks evident from the chart; It'd look to enter one pip above our bullish PB ie at 901.06, giving us a target of 4.69 (cf 4.75 at risk), giving us nearly 1:1 in terms of risk & reward.

Using a stop management approach of: moving the stop to one pip below the next pin-bar (and the next one, etc, etc) =>

Gets us stopped out approx 3 hours later at 902.48 ($1.42 above where we entered).

The natural responses is: "Ah, that's easy in hindsight VS!!!"

And you right, it is!!

However, it's only when I added the 10,21 & so EMAs that I realised that huge profits had gone astray...

Price moved between the 10 & 21 EMA at approx. midday. The 10 & 21's subsequently begin to converge - and then bang!! - price break-out to 909.00 at 6pm this evening.

It hit 910.50 the following hour....

Now guys, if anyone reading this still doubts T_D's methods....there's no helping them!!

TBC....

OK... first off why did you choose to draw the fibs where you did? It seems a bit of a random place to me (maybe I'm being thick!) - I think I would have drawn it from the same low as you but would have finished it at the 11th Feb high. This gives no confluence with the nose of the pin!

Secondly, on my chart North Finance chart I don't see any convergence of the 10 & 21 EMAs until they change direction at around 5pm. Also, I don't recall anything in TD's thread about convergence being any sort of signal. I think what he did say is that when the 50 EMA is trending, price will often pull back into the zone of the 10 & 20 before continuing with the trend. I don't think that is happening here as the EMAs were still signalling a downward trend and we were looking to go long.

Finally, referring to your earlier post, the 35 pips were achieved in EURJPY, not gold!

Hope this helps!

 

[Ljr]

Just looking at the EURGBP chart.

Look at the 'Pin' that has formed at 20h00 this evening. Not the best looking one but it does seem to be poking into some support that hasn't been touched since late30 Jan. There is a S/R pivot point lower down the chart so I'm not sure.
Will keep my eye on it.

 

[VinceStanzione]

Hi Leon,

Are you using MT4 & the Gold chart from the "metal" chart option?

I am pretty happy with the numbers. However, I am more than open to correction if you're using MT4 and can highlight my errors.

I am after writing over my current chart - because I'm in the middle of analysing a 2nd pin!!

However, I am more than happy to take you through it again, step-by-step, if you need me to.

No, if I can only figure out how to post charts!!:clap:

Cheers,
VS

 

[trader_dante]

Hi Vince,

I'm going to give you some feedback. You've made some very good observations but there are a few problems with your analysis.

Close is within range of previous bar; however, it's not near it's high/low.

As you rightly point out the pin bar fits ALL the criteria apart from the fact that the close is not near the low of the previous bar. You have to be aware that when the nose doesn't poke out far from the previous bar the setup is NOT perfect. Often when there are a lot of things in its favour then this isn't so important but it is worth noting for those times when you might consider taking a pin bar with no supporting factors.

- S/R pivot? Drawing a horizontal line at 896.64 gives several support & resistance signals => I believe this line (or around this line) is a significant S/R pivot. NB!!

Yes this is a VERY good pivot.

Fib Level? confluence with the S/R pivot of 896.64 at the 50 fib when the fib is drawn from 2008.02.06 10.00am swing low to swing high at 17.00 on the same day.

This part is wrong. You drew the fib from the CORRECT swing low BUT you need to draw it to the recent swing high (23:00 on 8/02/2008). Remember - you want to see whereabouts the current pin is in relation to the WHOLE swing not just a random swing on a random day. I hope this makes sense. Fibs are hard to explain. Anyway, if you draw the fib from your original point to the 23:00 high you will find the pin stalled not far past the 61 fib. I like to ideally see the pins stall AT fibs rather than before or after them. Again, you can play with the rules a little bit, find out what works and what doesn't.

In terms of a target, resistance at 905.74 looks evident from the chart; It'd look to enter one pip above our bullish PB ie at 901.06, giving us a target of 4.69 (cf 4.75 at risk), giving us nearly 1:1 in terms of risk & reward.

I have my "problem area" at more or less the same point so these figures are all good.

The natural responses is: "Ah, that's easy in hindsight VS!!!"

I tell you what, when you wait for the right setups its almost TOO easy most of the time. Sometimes you get burnt no matter how good things look but this is a strategy with a high win/loss ratio and if you are patient and are prepared to come out with breakevens when you are perhaps 1:1 in profit, you can from time to time get some very large moves. I've had a good deal of 10:1 trades.

However, it's only when I added the 10,21 & so EMAs that I realised that huge profits had gone astray...

Price moved between the 10 & 21 EMA at approx. midday. The 10 & 21's subsequently begin to converge - and then bang!! - price break-out to 909.00 at 6pm this evening.

It hit 910.50 the following hour....

You've got this slightly wrong. Wait for the 50 to slope one way and then look to enter on pullbacks into the 10, 21 zone. Here what you have happening is the 50 is sloping down in the morning and then the price retraces into the zone (infact this is the 12:00 pin bar that stops out the trade we've been talking about) and this is where we expect it to continue down. It does for a while and then sharply moves up as you note above. This up move was not predictable in the way I use the EMAs. I do NOT use convergence.

Hope this helps...I couldn't post charts tonight but I can tomorow. If you are unsure of anything ask or PM me.

Tom

 

[VinceStanzione]

OK... first off why did you choose to draw the fibs where you did? It seems a bit of a random place to me (maybe I'm being thick!) - I think I would have drawn it from the same low as you but would have finished it at the 11th Feb high. This gives no confluence with the nose of the pin!

Secondly, on my chart North Finance chart I don't see any convergence of the 10 & 21 EMAs until they change direction at around 5pm. Also, I don't recall anything in TD's thread about convergence being any sort of signal. I think what he did say is that when the 50 EMA is trending, price will often pull back into the zone of the 10 & 20 before continuing with the trend. I don't think that is happening here as the EMAs were still signalling a downward trend and we were looking to go long.

Finally, referring to your earlier post, the 35 pips were achieved in EURJPY, not gold!

Hope this helps!

Fib construction: When I draw fibs, I look to the previous swing low which mirrors the pin I'm currently looking at - and see where the next major break historically occurred wrt this previous swing.

ie I step back & take an overall view of the history of data in front of me, looking for trends. Some traders see fibs differently - it's just what works for me.

In terms of EMAs - they're something I've been drawing for years. As you probably know, MA crossovers are a huge signal of change/momentum. I saw the 10 & 21 begin to converge - then change direction - and could sense a big movement upwards. I may have incorrectly paraphrased T_D (& apologies for this) - but remember, we all have to find something that works for ourselves.

The convergence & subsequent directional change was a big signal for me - that I incorrectly it would seem - analogoised cf T_D's method.

Point taken on the 30 pips on the wrong market though!!!

Cheers,
VS

 

[eltrot1979]

Usdjpy H4 @ 16:00

This still hasn't broken either way and a couple of inside bars have formed. The Nose is at about 108.37. Drawing a horizontal line in at this level reveals some support around 4th Jan and resistance around 15th Jan, it also bounces around that area a bit on 21st-28th November 07. Drawing fibs from recent high to low, 10 Jan - 23 Jan, didn't reveal much, so I drew one from the previous days high to low instead and the 161.8 extension line is pretty close to the nose, though I believe TD doesn't pay attention to the extensions. I really need to learn more about these fibs and where to draw 'em!

The pins range is about 34 pins, which would be more than 5% of my meager account so I think I'll be passing on this.

 

[VinceStanzione]

Hi Vince,

I'm going to give you some feedback. You've made some very good observations but there are a few problems with your analysis.



As you rightly point out the pin bar fits ALL the criteria apart from the fact that the close is not near the low of the previous bar. Although I would still have taken it you have to be aware that when the nose doesn't poke out far from the previous bar the setups is NOT perfect. Often when there are a lot of things in its favour then this isn't so important but it is worth noting for those times when you might consider taking a pin bar with no supporting factors.




Yes this is a VERY good pivot.



This part is wrong. You drew the fib from the CORRECT swing low BUT you need to draw it to the recent swing high (23:00 on 8/02/2008). If you are drawing it to the swing high at 5pm on the same day. Remember - you want to see whereabouts the current pin is in relation to the WHOLE swing not just a random swing on a random day. I hope this makes sense. Fibs are hard to explain. Anyway, if you draw the fib from your original point to the 23:00 high you will find the pin stalled not far past the 61 fib. I like to ideally see the pins stall AT fibs rather than before or after them. Again, you can play with the rules a little bit, find out what works and what doesn't.



I have my "problem area" at more or less the same point so these figures are all good.



I tell you what, when you wait or the right setups its almost too easy most of the time. Sometimes you get burnt no matter how good things look but this is a strategy with a high win/loss ratio and if you are patient and are prepared to come out with breakevens when you are perhaps 1:1 in profit, you can from time to time get some very large moves. I've had a good deal of 10:1 trades.



You've got this slightly wrong at least it seems that way to me. Wait for the 50 to slope one way and then look to enter on pullbacks into the 10, 21 zone. Here what you have happening is the 50 is sloping down in the morning and then the price retraces into the zone (infact this is the 12:00 pin bar that stops out the trade we've been talking about) and this is where we expect it to continue down. It does for a while and then sharplye moves up as you note above. This up move was not predictable in the way I use the EMAs.

Hope this helps...I couldn't post charts tonight but I can tomorow. If you are unsure of anything ask or PM me.

Tom

Thanks for your feedback Tom.

It appears our way of looking at swing highs to construct fibs to differs.

However, this system is your baby & I'm more than willing to start using your method to draw my fibs.

Have to say though, I really do like taking that "step back" and looking for similiar patterns on my market data window.

Markets do trend & repeat themselves, afterall !! :clap:

Again, on the MAs - it's whatever suit the trader. As my username suggests(!), MA (SMAs primarily) is something I've spent ages styudying.

A potential cross-over AFTER the 10 & 21 changed direction is a big signal for me.

Again, though this is the system you've shown us to use - so I'll definitely try using a different MA approach.

Once again, thank you for your time. These worked examples & feedback are invaluable for anyone reading this thread who wishes to learn more.

Cheers,
VS

 

[VinceStanzione]

Right, I'm wrecked & it's time for the bed.

Plenty to analyse in work tomorrow - I'm going to have a good think about swing highs for fibs & this new EMA approach.

Thanks for all the comments - let's hope we all learn something!

VS