Making Money Trading

[trader_dante]

Further, note that if one had been watching this S/R zone for this instrument on the hourlies, they could have got a nice long entry from an hourly pin which would then have been confirmed by a daily.

This would have resulted in a stop of 23 (+ spread, margin for error) rather than 48 (+spread, margin for error).

Although this IS a pin bar, I like to see the body within the range of the previous bar.

 

[trader_dante]

Hi TD,

Thanks for the info on the new pin on the eur/chf, i got a question on that one.
When you posted it the bar wasn't finished yet, and now the body has become a little bit longer, do you still consider it to be a good pin?
In my opinion the body is a bit long, so i wouldn't be sure to take that one.

I found another one on the gbp/chf daily chart, it has some confluence from an old s/r line (been a resistance from august 2005 untill july 2006 see chart 1) and an old 50% fibo retracement (from the low at may 2003 till the top at july 2007 see chart 2).
Maybe you can give your opinion on the validity of this pin.

greets,
Reas

Reas, I saw that the body became longer after I posted the chart and it now, as you quite rightly wrote, looks a little long in proportion to the nose. It also falls just outside the range of the previous bar.

I completely agree with the analysis you posted on the Gbp/Chf.

A few other points I would add:

a) This pin is in a pivot ZONE that goes back to 1985! See chart 1

b) The pin is off an ascending TL AND its nose is almost directly on the 61 fib of the last major swing low. See chart 2 (which is a weekly chart for the purpose of showing the TL)

c) The pin looks a lot better on this pair so of the two trades this is the one I would be inclined to take.
See chart 3

 

[Splitlink]

Hi TD,

One of the first rules that you gave us was that the pin should traded in the direction of the trend. What is the direction of the trend with this example? You are looking at the one in Chart 2. I am looking at Chart 3, which is a downtrend from July.

I feel that it is too early to say, yet. I prefer your entry in Post 111 and, in post 329, it can be seen that the pins to trade are in the downtrend.

Regards Split

 

[trader_dante]

Hi TD,

One of the first rules that you gave us was that the pin should traded in the direction of the trend. What is the direction of the trend with this example? You are looking at the one in Chart 2. I am looking at Chart 3, which is a downtrend from July.

I feel that it is too early to say, yet. I prefer your entry in Post 111 and, in post 329, it can be seen that the pins to trade are in the downtrend.

Regards Split

Hi Split, I don't believe I specifically gave the rule of trading in the direction of the trend.

I trade WITH and AGAINST the trend and also when there is NO discernible trend.

Pin bars AGAINST the trend frequently provide large moves. The Gbp/Usd countertrend weekly pin I noted at the end of last week moved 430 pips before stalling and the Usd/Cad pin moved 440. (Although In both cases the R:R was only slightly over 1:1 with a stop above/beneath the pin)

My all time biggest win has been off a countertrend trade which went long the FTSE very close to the August bottom.

However, you should only trade in a way that you are comfortable with.

 

[superspurs]

just reviewing my isa,and vedanta looks like a qualifier for a long on the weeklys,sorry the fib lines are in the way

 

[trader_dante]

just reviewing my isa,and vedanta looks like a qualifier for a long on the weeklys,sorry the fib lines are in the way

Hi superspurs,

Good observation. This bounces off a previous swing high making it a minor S/R pivot. (See black line) I wonder if you draw this line in and zoom out further whether it has come into play previously?

Also you could try drawing a fib from the previous swing low where the market was ranging. (See arrow). See if any levels line up with the nose of the pin. This will give you added confluence.

Finally, whenever you consider taking a trade, remember to plan how you will react to the market once you are in it. The red line I have drawn on the chart looks like the first area of obvious resistance that the market has directly failed at three times now. This could be an area to:

a) Take profit

b) Tighten your stop

c) Look to add to your position if it breaks through and retests from above

Regarding your entry: Sometimes price will retrace part way down the pin BEFORE triggering it. If the low of the next bar lines up with the low of the one immediately preceeding the pin, you could put your stop here for an excellent risk:reward trade. (there are also other bar lows here adding to its strength as a support)

If you take this, please update us on it.

 

[Splitlink]

Hi Split, I don't believe I specifically gave the rule of trading in the direction of the trend.

I trade WITH and AGAINST the trend and also when there is NO discernible trend.

Pin bars AGAINST the trend frequently provide large moves. The Gbp/Usd countertrend weekly pin I noted at the end of last week moved 430 pips before stalling and the Usd/Cad pin moved 440. (Although In both cases the R:R was only slightly over 1:1 with a stop above/beneath the pin)

My all time biggest win has been off a countertrend trade which went long the FTSE very close to the August bottom.

However, you should only trade in a way that you are comfortable with.

Don't worry, it's amazing how quickly I can get comfortable by trading 440 point moves:!:

Split

 

[laptop1]

You should blend candles together. One suggestion is, if you are looking to go long with a pin bar, (what I call a Hammer) I look back 3 to 4 bars looking for 3 out of 4 bars to close down.I like to see one of those days being an up day preferable opening and closing near the high, before the signal bar the Hammer or what you call a pin bar. just some thoughts for you to ponder over.

 

[superspurs]

hi td,thx for an interesting thread,in reply i zoomed out and see that the nose found the 38 fib from the level you pointed out,also the nose found the 23.6 fib from the 04 lows.as im already long this,i shall look to add a SB at the 2000p level,with a stop at 1840

 

[trader_dante]

hi td,thx for an interesting thread,in reply i zoomed out and see that the nose found the 38 fib from the level you pointed out,also the nose found the 23.6 fib from the 04 lows.as im already long this,i shall look to add a SB at the 2000p level,with a stop at 1840

The zoomed out chart adds strength to the S/R pivot and this combined with the confluence of fib levels makes this a high probability trade.

Thanks for posting superspurs.

Tom

 

[trader_dante]

Stop Buy: Gbp/Chf

I have put my order in to go long Gbp/Chf above the high of the daily pin.

Since this morning's retracement took us not far past the level of the left eye before it found support I am putting my stop beneath todays low rather than beneath the pin to reduce the risk.

 

[forexbee]

I have put my order in to go long Gbp/Chf above the high of the daily pin.

Since this morning's retracement took us not far past the level of the left eye before it found support I am putting my stop beneath todays low rather than beneath the pin to reduce the risk.

Hi TD,
I was about to ask you , whether you have initiated for GBPCHF, thanks a lot for updating.
I would like to know what is the stoploss you would say that you cannot afford to take a trade.
Eg: This GBPCHF has a stoploss approx 150pips. Would be glad if you could show how you determine the stoploss is too big or moneymgmt tech... (In spreadbetting, what is your max bets considered in a trade) I believe it depends on trade & its odds in favour of the trade, pls clarify.

Do you have any classification for Pinbars like Class A , B, C and enter trade accordingly. I remember i read this in J16 thread.

Fxbee

 

[trader_dante]

I would like to know what is the stoploss you would say that you cannot afford to take a trade.
Eg: This GBPCHF has a stoploss approx 150pips. Would be glad if you could show how you determine the stoploss is too big or moneymgmt tech... (In spreadbetting, what is your max bets considered in a trade) I believe it depends on trade & its odds in favour of the trade, pls clarify.

Hi Fxbee,

I determine risk the same way on all my trades. Firstly I work out what percent of my account I am willing to commit to a certain trade.

Let's say my account is at £3,000 and I am willing to risk 5% per trade.

I would then work out what 5% of my account equity is by doing the following calculation:

3,000/100 = £30 (dividing by 100 gives us 1%)
30 x 5 = £150 (multiplying the answer by 5 gives us 5%)

Now if my stop is 150 I know that I can only risk £1 per point and I am risking EXACTLY 5% on the trade.

Lets say that I had a better entry and the risk was only 50 pips. In that case I would up my stake to £3 per point.

£150/50 pips risk = £3

The only way a stoploss would be considered too big would be if taking the position at the MINIMUM SIZE were to result in too big a potential loss for my account.

So as in the above example, if I wanted to only risk 5% and the minimum size I can trade at is £1 a pip then I CANNOT take a trade with a stop loss of larger than 150.

My risk is not always FIXED to an exact percentage but I have an upper limit that I am not willing to go past. For reasons discussed previously about individual risk profiles I am not going to reveal this here.

Do you have any classification for Pinbars like Class A , B, C and enter trade accordingly. I remember i read this in J16 thread.

I personally don't do this.

Why would anyone take a B or C class pin?

 

[forexbee]

Hi Fxbee,

Why would anyone take a B or C class pin?

Hi TD,

Thanks a lot & a very quick reply.
Regarding a,b or c class pin, iam not sure how pin is classified as a,b or c... Though you might know how it is classified... fine anyway, will try findout.

One more thing, have you been to any of the events or seminar provided in the trade2win home page under upcoming events, how useful for newbies it would be (If any other fellow traders know about it, pls share).

Fxbee

 

[trader_dante]

One more thing, have you been to any of the events or seminar provided in the trade2win home page under upcoming events, how useful for newbies it would be (If any other fellow traders know about it, pls share).

I've not been to any of these. I'm always skeptical about these seminars, probably because of the buzz words they use in their advertising like "traders secrets".

I always wonder why they are inviting everyone for free? Are they going to try and sell you something or get you to use something?

 

[Reas]

I have put my order in to go long Gbp/Chf above the high of the daily pin.

Hey TD,

I have put in this order too naturaly
My stop is below the pin-low right now, but maybe i'll reconsider.

 

[Blackey]

Hi TD - Do you know of any software that could scan markets for pin bars? I'm not lazy, I swear!!


Thanks - Gavin.

 

[trader_dante]

Hi TD - Do you know of any software that could scan markets for pin bars? I'm not lazy, I swear!!


Thanks - Gavin.

Hi Gavin,

There was an indicator posted on the J16 thread a while back that scanned for all the different types of bars. It was for use with MetaTrader and alerted you when one of them occured. I'm afraid I don't have the link though.

 

[Blackey]

Hi TD - Thanks for the quick reply. I'll dig up that thread and take a look at Meta Trader.


Thanks - Gavin.

 

[lurkerlurker]

I have put my order in to go long Gbp/Chf above the high of the daily pin.

Since this morning's retracement took us not far past the level of the left eye before it found support I am putting my stop beneath todays low rather than beneath the pin to reduce the risk.

I took a long from 22960, which is 20 pips below the break of the PDH. The mischief behind this idea was to allow a tighter stop and get a slightly better entry - however, the pin signal is not valid until the high is broken, so I'm a little annoyed at jumping the gun.

I'll take a look again around 8pm tonight, and if I haven't been stopped out I'll consider whether I wish to roll the position over into tomorrow.

Again, this pair had a valid hourly pin which turned into a daily pin on Friday close. I'm thinking it would always be better to go for the hourly pins, and then perhaps add to the position if they are confirmed on a daily.