Although I now little or nothing about that particular instrument, I feel the following are general comments and applicable to any market. Hope nobody minds me interfering, but I've been following this thread with great interest.
Hi Firewalker, we're privileged to have your insights. This is a fantastic post
🙂
I feel your questions are rhetorical but I would like to answer them nonetheless:
(1) Some pin-bars have a higher probability of success than others. Why is that?
What gives some pin-bars a higher probability of success is WHERE they appear.
(2) You said it acted as support twice "today". If you are trading of daily bars, what does intraday support mean to you?
Intraday support should rarely merit consideration when you are trading daily bars.
(3) As others have said before, always have several reasons to enter a trade. Did you have enough objective reasons to warrant your entry? Or were you just impatient?
Looking at Lurkers entry I would say there were enough reasons to warrant an entry on the break of the pin but entering early was a bad decision. I think this was less a result of impatience and more to do with poor discipline.
Lurker said his reason for entering early was to LIMIT his risk. This implies that the added risk of entering on a break of the pin was UNACCEPTABLE. The number one rule for me is this: If you cannot afford to take the risk on a trade with its proper stop, then pass on the trade.
(4) Technically, going longs was against the trend. We just had a swing high that didn't travel very far, so the market looked weak (see chart). Taking a pin-bar there, looks like trying to catch a falling knife. We all have different tolerances for risk, but I would've never taking a long there. Have you thought about what the potential reward of that trade would/could be? Perhaps a small retracement upwars... but does that warrant the risk?
I realise that what I am about to say may prove to be rather unpopular. However, in my PERSONAL experience I have found that counter trend trading is profitable if the pin bars are at extreme highs and lows.
The important thing to remember is that reversals are often sharp and travel far. Therefore, IF you can hold a position through such a move you can often make far more than the amount you have lost attempting to find a top/bottom.
...in the end it illustrates the fact that copying somebody else's trading style won't make you profitable overnight. An edge is something personal and trading pin-bars is only a concept. Getting the feel of it and making it your own requires time and effort.
I'll be completely honest with you all here. When I started this thread I wanted to show you all exactly how I am managing to make profitable trades consistently but the more I respond to peoples questions the more I realise that my edge is personal and many times I will have a reason to enter or exit that I find very hard to explain. What I am trying to do is give you the tools to arm yourself.
This methodology works. TRADING PRICE ACTION IS A PROFITABLE STRATEGY.
You should all go away, practice it and make it your own.
But that is not the end of the matter. Once you have an edge you have to hone it. This is something that I am still doing every single day. I am constantly trying to improve my performance and I do this by always evaluating my trading and my feelings regarding it.
