perfect pin bars

[cmmichaels]

Hey CM,

Sure thing. First, let me stress again what is most important - we're talking about my opinion. I am not saying that the trade was a bad one, that you were wrong to take it, that you won't make money taking trades like that. If you can demonstrate to your own satisfaction that something has positive expectancy, go for it.

Let me also say that in my early days I too would have been all over set ups like that.

However, I am now ultra, ultra choosy (see below) and that set up has a few too many negatives (note, set up, not just bar) in my view. Remember too that we're looking for "perfect" set ups. "Perfect" is tough to get.

Anyway, in brief, the bar is kind of small in my opinion. Not terrible, but it does not immediately jump out. The close is OK, but it closed blue, and apart from very exceptional circumstances, I have decided to require a close in the intended direction.

I personally don't see a lot of space so I agree there - in my opinion it starts to run out pretty quickly (around the close of the next bar really. I would also take issue with your triple top classification - yes it is close, but for me I would need to see it equal or preferably exceed the recent high before being rejected. It gets close, but doesn't quite make it. I've seen these situations too many times.

Instead of just looking for the trigger bar (you can do but it's good to take it a bit further) try to think what market action is actually represented by what you are seeing.

To give you an idea why I am so picky, I trade intraday, four different markets, for around 7 or 8 hours per day. My month has just ended (I did not miss a single day) and I took FIVE trades all month. It is VERY tough to trade this way.

At least it is until you consider that all the set ups I took were very obvious, I had three wins, one loss and one more or less break even (slightly better, but those very marginal ones I count as break even), and that at the end of the month I was up just over 15.5%.

That's why I automatically pass on bars like the one you posted. Low stress, a 75% win rate and over 15% return in month.

You should also consider your eventual aim. If you want to trade for a living, unless you have balls of solid concrete, low variance is going to be very attractive to you.

But like I said, all that really matters is that you have proven to yourself that your approach works. If you have, none of the above matters one jot.

Hey Stronzo,

I really appreciate the feedback very interesting read. Yeah you're right I agree with you on everything you have said and I guess it goes to show my mentality needs some work because I knew it wasn't perfect really but I was glorifying it as such. I guess because when you are new and you see things like that you think you have hit the jack pot but I can cleary see as well how this could not have worked, although I was also looking at the big round number involved as well looked to add some weighting to the preceedings.

Sounds like you have the mentality and trading plan to succeed for a long time I wish you all the best. So if I am clear you are actually trading intraday not even swing trading and you still only had that many set ups in a month! As my understanding went if you are swing trading you are likey to have less set ups but bigger wins but day trading more set ups smaller wins, I guess my point is your trading style sounds extremely ruthless but as I understand that is the name of the game. I have had some time recently and I was day trading the DAX and I found 4 good set ups in 1 day although other days to be fair I found nothing. What time frame are you watching for your set ups if you don't mind me asking?

Anyway thanks again for taking the time to critique much appreciated.

 

[pboyles]

Hey CM,


Anyway, in brief, the bar is kind of small in my opinion. Not terrible, but it does not immediately jump out. The close is OK, but it closed blue, and apart from very exceptional circumstances, I have decided to require a close in the intended direction.

.

Did you do any analysis on bars that close in either direction, whether there is an edge in only taking them in the intended direction? I seem to recall looking into that some time ago and I didnt think there was a massive difference. I'm not sure how much analysis I actually did though, maybe I just looked back a few days and didnt see a massive difference.

Is it just another thing you like to see, just to give you more confidence?

 

[cmmichaels]

I think you've been extremely coherent and thanks again for the reply. I have obviously read things similar to this but you have certainly shed some more light on what is required to succeed. I have no idea when I would be in the position to trade for a living but right now im working as hard as I can to get to a point where I have the knowledge to trade consistently well. What I seem to be finding is intra day trading using tight stops but a bIgger exposure looks to be my preferred style although I have been mainly studying swing trading techniques for about a couple of years now it seems that you need to be a able to understand this technique before you are really going to be able to succeed intra day. Essentially from what I can see they are all similar techniques but implemented slightly differently. Was your journey similar or did you start day trading straight away. The way I see it you want to be at a point where you can at least trade 1 contract per trade maybe more to do that you need to learn high probability trades with tight stops of around 5 pips where if you are wrong you know you are wrong quick. I suppose you can earn good money with any trading strategy as long as you have the mindset that you mentioned above.

 

[Tradingkid09]

Did anyone who trades this way take some money from this pin on the bund, they don't really come much better than this. Not a pivot point but triple top so still v.good set up contained in the left eye, swing point, etc...

That pin bar is a little too small and against the trend for me, but obviously price pullback a little bit before moving higher, so it worked for you. But, I don't think this would qualify as a "perfect" pin bar setup, at least in my humble opinion.

 

[Eclipse89]

Jeez, why crappy stochastic-statistic threads are full while this has been off for 2 months?

The concept of filter bad setups by analyzing how a perfect pinbar looks like is good, BUT you miss the second part of the game, which is VOLUME.
No volume, no party.

Keep this thread up bitchez!

 

[Tradingkid09]

Jeez, why crappy stochastic-statistic threads are full while this has been off for 2 months?

The concept of filter bad setups by analyzing how a perfect pinbar looks like is good, BUT you miss the second part of the game, which is VOLUME.
No volume, no party.

Keep this thread up bitchez!

I agree we should keep this thread rockin instead of threads about indicators like stochastics that are just a waste of time.

A question for you though, how do you use volume in Forex?

 

[Dick Lexic]

I agree we should keep this thread rockin instead of threads about indicators like stochastics that are just a waste of time.

A question for you though, how do you use volume in Forex?

TK09, i have just started taking an interest in forex and wondered the same thing. as i understand it the volume figures shown for forex is the number of people trading where as in the indices it's the number of shares traded but i'm not really sure. i have been using a very simple way to eye the volume and that is to look at where it is, so if price is trading above the last significant volume bar (pin bar?) i am bullish and vice versa. i find intraday volume can throw it a bit so i am always aware of the daily volume levels. as i said i have just started looking at forex but i do look at volume as a piece of the jigsaw.