Making Money Trading

[trader_dante]

Just saw your chart, (I hope arrows you pointed are pinbars ) from extreme right first one marked with down arrow does it qualify a PIN....looks the body of candle is long...

NO - the arrows are NOT meant to mark pin bars. They are simply meant to denote that there was pressure at this point from the resistance. The only proper pin there, in my opinion, is the one I traded. The top middle one looks good but the open/close is just outside the left eye. Sometimes I take these if the confluence is very good but most often I leave them.

By the way, using your lessons, GBPCHF is on short entry and 39pips as i write this post....

This makes me very happy. Well done!

 

[trader_dante]

However, I wouldn't trade a pin bar on a M5 chart, no matter how convincing it looks. Perhaps trader_dante could tell us a little more about which timeframes he considers to be valid.

I don't think forexbee is trading off 5m - at least I certainly hope not!

I use daily and 1hr TF ONLY.

Trading off the lower timeframes will kill you if you are new to this game.

Practice on daily TF first. When you have confidence in your trades and you start to win consistently, you can try 4hr and 1hr. But you should always demo these first or use a very small amount of risk capital that you can afford to lose.

The setups work on all timeframes but playing them is a different game. You have to be incredibly fast on the lower timeframes. It is stressful and in my opinion, unneccessary.

This is not to say that you shouldn't find what works for you but take things slowly. Learn the technique first.

Some traders are only comfortable with the lower timeframes. It suits their personality and risk profile.

Over time you will become aware of what timeframe and in what style of trading you work best in. This comes from experience.

I always wanted to be a position trader like my heroes Darvas, Livermore, Richard Dennis and all the other Wall Street Legends. But I am without a doubt better at making money on the hourly than I am on the daily. On this lower timeframe I can really get a feel for the market and I tend to operate far more effectively.

What I want to do and what I have found I am good at doing are two very different things.

 

[combotrader]

Quote

What I want to do and what I have found I am good at doing are two very different things.[/QUOTE]

You know what TD, this is true not just of trading, but of life as well. Very imp, IMHO.
I read somewhere trading is a bit like psychotherapy - it drags out the worst and then the best in you - and then the worst again over time. Our job as traders is to find out about ourselves - otherwise one cannot succeed.

I am tired of words...dont mean anything. Doing is so much harder.

Keep going mate - want to see more stuff about your risk management.

CT.

 

[forexbee]

Pleased to hear you are making some pips forexbee, and more importantly are watching the thread. However, I wouldn't trade a pin bar on a M5 chart, no matter how convincing it looks. Perhaps trader_dante could tell us a little more about which timeframes he considers to be valid.

The trade is in the direction of the trend though - taking a trade with the trend can bail you out of almost anything.

I've looked at the GBP/CHF, and the only entry I see is the pin bar at 19:35 on the M5. Could you let us know which signal you took, and where your stop and target are?

Hi Lurkerlurker,

Thanks mate, i use 4Hrs & Daily chart (As TD pointed i dont trade less than 4hrs) , only from this thread i started looking at daily. Earlier was using 4Hrs, But for Pinbar i use both Daily or 4Hrs whichever signals with all parameters told by TD.

Entered short @2.4010 1lot around 16:00ish
SL: 2.4092
TP1: 2.3964 (0.50lot)
remaining on Breakeven+1pips (2.4009)


Fxbee

 

[nine]

Time-Zones

Just a thought on Pin-bars and other bar formations.

Be wary of your time-zone.

If most of the world is seeing these bars based on a London or New Your clock (say) and they are on 4 hour bars then you need to have your 4 hour bars start at the same time theirs do - if they don't then you will see pin-bars when the rest of the market sees something completely different. If your view is different then no-one else will support your trade!

Not such a problem if you're using 60 minute bars except for people in time-zones like Adelaide which are 30 minutes out from reality

Edit: Note that London and NY are currently 4 hours apart so they see pin bars on 240min charts the same way.

 

[trader_dante]

Earlier was using 4Hrs, But for Pinbar i use both Daily or 4Hrs whichever signals with all parameters told by TD.

Entered short @2.4010 1lot around 16:00ish
SL: 2.4092
TP1: 2.3964 (0.50lot)
remaining on Breakeven+1pips (2.4009)

fxbee, I am glad this trade worked for you but the circled bar on your chart is NOT a pin. The body is far too long in proportion to the nose. We want to see a long nose and a small body that is in the top/bottom 1/3 of the bar.

In addition, although it stalled AT the fib levels it did not stall ON or very CLOSE to them.

Finally, although I can see resistance from previous bar highs, it is not a particularly obvious area of resistance from what I see on your chart.

I hope you don't mind me criticising your trade like this. Everyone should trade their own interpretation of what I say and if you feel that the entry makes sense to you then that is good. After all, it is your money that you are risking. But if you are going to say that you are taking setups with "all parameters told by TD", I have to correct you on them

 

[fibonelli]

Shares! On 30m charts! :!:

Fib - I have to say that I am not keen on the look of your pins. The first one has a big body in relation to the nose and the open/close is not within the left eye. The other pins are "in traffic". What I mean by that is that their nose doesn't poke out into space away from the other bars.

TD

I'm only testing a strategy on a 30m chart of a volatile share!

Are you saying that cluster of candles "in traffic" with:
1. Buying pressure at the lows pushing the close nearer to the high than the low;
2. A sequence of rising lows;
3. Inside and Narrow Range Bars;
4. At, or very close to previously held support (4 hr);
5. At, or very close to 38.2% fib retrace of a multi day 5 wave breakout (4 hr);
6. At, or very close to 50ema (4 hr)
7. Very close to a round number, namely,1500;

In addition:
8. At, or very close to 20ema (daily);
9. Bullish Regular Momentum Divergence on a short period oscillator (30 min).

Should be ignored?
And, disregarding 190+ pip return for 30 pips of risk?

 

[trader_dante]

Pin bars

The first chart I posted in this thread was a chart of the FTSE.

Let's have a look at this index again.

In this chart of the daily TF you will notice two pins that could have been traded profitably.

The second one called the top in the market which has still not been convincingly broken.

 

[trader_dante]

TD

I'm only testing a strategy on a 30m chart of a volatile share!

Are you saying that cluster of candles "in traffic" with:
1. Buying pressure at the lows pushing the close nearer to the high than the low;
2. A sequence of rising lows;
3. Inside and Narrow Range Bars;
4. At, or very close to previously held support (4 hr);
5. At, or very close to 38.2% fib retrace of a multi day 5 wave breakout (4 hr);
6. At, or very close to 50ema (4 hr)
7. Very close to a round number, namely,1500;

In addition:
8. At, or very close to 20ema (daily);
9. Bullish Regular Momentum Divergence on a short period oscillator (30 min).

Should be ignored?
And, disregarding 190+ pip return for 30 pips of risk?

LOL

OK, I consider myself TOLD

No, of course I am not saying that BUT I am still standing by my opinion that the pins THEMSELVES don't look good.

I know some of the newer traders among us still don't understand the pins by some of the posts and PMs I am getting and it is important that they do. If there are many factors, as you state, in a trades favour then it somewhat takes the emphasis off the pin itself but to play it JUST off one or two supporting factors as I am saying can be done, needs a perfect looking pin.

 

[forexbee]

Hi TD,

fxbee, I am glad this trade worked for you but the circled bar on your chart is NOT a pin. The body is far too long in proportion to the nose. We want to see a long nose and a small body that is in the top/bottom 1/3 of the bar.

In addition, although it stalled AT the fib levels it did not stall ON or very CLOSE to them.

I hope you don't mind me criticising your trade like this. Everyone should trade their own interpretation of what I say and if you feel that the entry makes sense to you then that is good. After all, it is your money that you are risking. But if you are going to say that you are taking setups with "all parameters told by TD", I have to correct you on them

Iam happy TD, No problem in critising, by this i get chance to correct myself, i was looking for someone to critisize if there is any mistake in my trade. (So will say "all parameters told by TD" )

I had a doubt about the candle whether is pin or not (though had a thought why not try this trade), but confused myself with AUDCAD chart which also showing short entry (i posted that chart today and had your reply too). I have to look out for this type of mistakes.

Finally, although I can see resistance from previous bar highs, it is not a particularly obvious area of resistance from what I see on your chart.
them

I didnt understand this above part on resistance from previous bar highs!.....( i think you are pointing at fib line?)

Previous bar high has a resistance line which is a fib lines, and it has got 10pips difference for 38.2% and 61.8% where the signal bar (which i thought wrongly pinbar)

Support resistance pivots lines are in red which is above 61.8% fib...

Correct me if something iam missing... (Did u get my PM).

Fxbee

 

[forexbee]

The first chart I posted in this thread was a chart of the FTSE.

Let's have a look at this index again.

In this chart of the daily TF you will notice two pins that could have been traded profitably.

The second one called the top in the market which has still not been convincingly broken.

Hi TD,

Thats really a wonderful chart... have to keep in mind how pinbar should be ...
Which chart you use for Indices....MT4 is for FX only i think so...

As i remember you trade thru SB, if you dont mind can i ask you what sort of stake you place on trade ...!?
You know any SB to trade under £1 for trade...! I have seen few take min £1 as stake...

Fxbee

 

[trader_dante]

I didnt understand this above part on resistance from previous bar highs!.....( i think you are pointing at fib line?)

Yes you are right - I was looking at the bar highs, seeing the line and thinking of it as a resistance line rather than a fib. My mistake. But remember, try and look for setups that have fib confluence WITH solid support or resistance or the support/resistance pivot that I have already explained.

Did u get my PM

Yes. I've responded.

 

[trader_dante]

Hi TD,

Thats really a wonderful chart... have to keep in mind how pinbar should be ...
Which chart you use for Indices....MT4 is for FX only i think so...

As i remember you trade thru SB, if you dont mind can i ask you what sort of stake you place on trade ...!?
You know any SB to trade under £1 for trade...! I have seen few take min £1 as stake...

Fxbee

I use MT4 for FX and my SB brokers charting for all other markets.

The stake I place on an individual trade differs according to the number of ticks between my expected entry price and my stop. The minimum I trade at is £1 a tick and maximum right now is £5. This relates to the account I am currently trading. I have traded smaller than this in the early days and I have also traded much larger.

There are several SB brokers that let you trade for under £1. Finspreads are one of them. IG Index are another.

 

[Tennis]

EDIT: Tennis is referring to the pin bar that was forming as I posted this chart above: http://www.trade2win.com/boards/attachment.php?attachmentid=30462&d=1193770559

The closest I can come to a reason is that the pin nose is not poking out far enough from the other bars and there is also not enough space between it and the other bars. I think the body extends too far up into the previous bar.

Thanks T_D, that makes perfect sense being that the pin itself isn't even really a pin - with the body making up half of it's size. This is exciting stuff, I love hearing what you have to say, hopefully you will keep this thread going for awhile!

 

[gedward3]

Hi T_D,

I did vote for indicies at first because i thought to trade them was easier. Im now thinking that the forex is better as its open 24 hours so no matter what time of day we look at, there are many charts to choose from. Giving that myself and many including yourself dont trade and cant trade full time its easier to flick a chart up at 3am or 4pm and still get a good idea of whats happening in the markets.

Your right on the free charts as well. I can access various forex charts through different brokers and when i see you pull a chart up i can do that as well.

Change my vote to forex as im realising that what i learn on forex can be transferred to other markets.

Great thread.............. What i was gonna say is ive learnt more on this thread than in all the books ive read. But i cant say that.

What you are providing is that line of filler that these authors dont put in their books.

Maybe they dont wanna tell the full story or they expect you to know it.

What your doing is putting the missing bits to many peoples education.....

Gordon Brown tune in for advice....................................But dont nick our pensions again...

keep goind T_D

Well, for better or worse, the poll results are in!

Indices win so I am going to concentrate my operations in this area (with regards to this thread).

I would still like to post setups and calls on the other markets too, though.

The point of letting you all choose a market was to show you that price action works across all of them. However, as I have said before, I find it easier to make money in some markets rather than in others. Less than 10% of the money I have made in my personal account has come from trading indices.



However, indices provide some clear and very profitable signals so without further ado lets do this!

Wish me luck!

 

[gedward3]

T_D,

Sorry to ask this but is a doji thr same as a pin bar.....

Maybe i missed something

Hi smbtnt,

The price action itself ruins this setup in my opinion. This doji represent indecision and is often found at areas where price consolidates or catches its breath before moving on. The doji also appears to have a small range. When bars have a low range you have to be careful because price can drift into your stop order, fill you and then turn. That is why pin bars are reliable because they show that price momentum (at least in that bar) has significantly turned. When you enter this move you are on the RIGHT side of this momentum.

Aside from this though it's not bad. There is a visible S/R pivot and it is close enough to have confluence with the 61 fib.

But smbtnt, look at your chart again. This is what you want to see. A pin bar with a long nose that by virtue of its length shows a FIRM rejection of that previous resistance level on the left and confirms it is now support. This really stands out to me. This is probably because it worked. But I can tell you that if I had seen that I would have almost certainly taken it.

While I'm at it let me write for a minute about the 4hr TF. I don't trade 4hr setups.

There is no real reason for this. I just don't. I actually learnt this technique with the aim of applying it to daily bars. I was always told that until you have mastered the higher timeframes you shouldn't trade the lower. I was advised to make sure I was a consistent winner on daily and weekly before moving down to 4hr and 1hr. However, who ever does what they're told?

After learning the technique and trying the daily timeframes, I went straight in on 1hr and it is only then that I found considerable success.

I make almost all of my money trading 1hr setups.

So, as I said, you can get some great setups on 4hr but for some reason I skipped it and as a result don't feel totally comfortable trading it now.

 

[forexbee]

Pinbar?

HI TD,

Could see the marking on this EURJPY has got pinbar the circled candle, since it has got peek thru 38.2% confluence and also passess thru pivot i identified....!?
(Even if it is wrong i think people like me newbies benefit by knowing how not to read the pinbar or how the pinbar shouldnt look like:cheesy:

Fxbee

 

[JillyB]

HI TD,

Could see the marking on this EURJPY has got pinbar the circled candle, since it has got peek thru 38.2% confluence and also passess thru pivot i identified....!?
(Even if it is wrong i think people like me newbies benefit by knowing how not to read the pinbar or how the pinbar shouldnt look like:cheesy:

Fxbee

Hi Fxbee,

If it were me - I wouldn't class this as a pinbar. To me a pinbar needs to have a small body, so the open/close need to the very near to each other. The other thing I look for is that the open/close of the pinbar are totally contained within the high/low of the previous candle (to the left). On this chart the candle you are looking at does not have these.

However, you are correct in saying that it is bouncing of a level of support/resistance and the long tail suggests that price is rejecting going lower, however I would be looking for the following candle to confirm this reversal move, which it does here with a bullish engulfing candle next. For me, I always look for price to confirm a reversal by closing above the next fib level - so, for instance, if price goes down to the 61.8% fib and is rejected at this level, I look for a positive close above the 50% fib before I would enter.

Hope this helps a bit. I'm sure t_d will have more to add.

 

[trader_dante]

T_D,

Sorry to ask this but is a doji thr same as a pin bar.....

Maybe i missed something

No, they are different things.

Have a look at the chart.

 

[trader_dante]

If it were me - I wouldn't class this as a pinbar. To me a pinbar needs to have a small body, so the open/close need to the very near to each other. The other thing I look for is that the open/close of the pinbar are totally contained within the high/low of the previous candle (to the left). On this chart the candle you are looking at does not have these.

This is an EXCELLENT answer. I agree 100%. Thanks Jillyb.

However, you are correct in saying that it is bouncing of a level of support/resistance and the long tail suggests that price is rejecting going lower, however I would be looking for the following candle to confirm this reversal move, which it does here with a bullish engulfing candle next. For me, I always look for price to confirm a reversal by closing above the next fib level - so, for instance, if price goes down to the 61.8% fib and is rejected at this level, I look for a positive close above the 50% fib before I would enter.

I don't play these quite the same way as Jillyb. If I see a pin bar that looks good, I enter AS it breaks the high of the pin. Jillyb is playing these in the way she is comfortable with which is to say she looks for a more significant confirmation of the reversal.

An agressive trader can play a pin as soon as it has closed and before waiting for a break of the high/low of the bar. I don't see the point of this in most circumstances since a good pin closes at or near to its high/lows anyway. However, in markets that are not quoted 24hr this can work and get you in before a gap up/down (with the inherent risk that the market could also open AGAINST you too)

There are also other ways to play them depending on how conservative you are. Some traders wait for a retracement of the pin so that the stop is much smaller.

The problem with this technique is the pin is not validated UNTIL the high/low of the bar (depending on which way it points) is broken so you are entering before the probability is there that it will work. Also, many pins will not retrace at all meaning you will miss out on a good many moves.

The advantage is that you MINIMISE your risk and MAXIMISE your potential return if it works. I don't do this but IF YOU WANT ME TOO, I will show you HOW it can be done.

One final way is to wait for the right eye to form. Look at the example I posted above. The left and right eye are almost matching. If you see this it can be viewed as ADDED confirmation that the pin is going to be a good one. Again, you don't see this every time and if you wait for it, you may end up missing a move.

There are different ways to play these, playing them on a BREAK is simply how I do it.

Finally - I apologise for so many words and not many images. I can't get images up very easily at work as people can see my screen...words are far less obvious than editing charts