pins

[klastica]

I was thinking of trading using pins bars as my main indicator.
Has anyone ever traded every pin they see regardless of where it appears (in the trend or S/R levels). I did a little back testing and I'm pretty sure it's more than 50% success rate and many really big moves start with a pin.
I'm sure R/R would be quite high making it profitable.

What do you think?

Anyone tried this?

 

[Alex411]

Pin Bars Introduction

Sorry, have you read this article?

 

[rags2riches]

I was thinking of trading using pins bars as my main indicator.
Has anyone ever traded every pin they see regardless of where it appears (in the trend or S/R levels). I did a little back testing and I'm pretty sure it's more than 50% success rate and many really big moves start with a pin.
I'm sure R/R would be quite high making it profitable.

What do you think?

Anyone tried this?

http://www.trade2win.com/boards/metatrader/59878-pin-bar-indicator-2.html#post744298

 

[nine]

Pin bars are part of the picture. Any PA without the zone where it becomes high probability is an average bet at best. Don't bother with average bets.

This is something that I posted on another board ... and my not make complete sense ... but work at it:

The funny thing about PASR is that people seem to have trouble with both PA and SR. I liked Strat's post on hammers and I thought I'd share a couple of other views that might help someone to see it.

First, my own view comes from years of trading pullbacks where I decide on the probable trend then wait for price to pull back (which increases liquidity for a further move) and then continues. What one is looking for in this type of trading is a micro-version of the big PASR.

a) You want probable support for the pullback - and the SR part could come from the high that price just broke out of or from earlier swings back. Once you have a zone then you have a good probability that if you get PA then you will be rewarded for taking the bet.

b) Then you want an indication that this SR will hold and the trend will resume. SR alone gives you X% chance of resumption and some people will trade that. SR + PA gives you X+Y% chance and thats what Strat is suggesting you wait for.

When you have SR you know that the big boys will be thinking "here's where its worth getting in again so we'll start buying as it approaches SR." And some of them will. But until the PA is formed you don't know whether the buyers are winning over the sellers. When the PA is finished then everyone (good pa can be seen by most people) will be saying "the buyers are winning" so everyone will see that, if they want to get back into the trend they have to start buying now. Hence the momentum.

So I am looking for something that shows that price rejected prices below support. It could be a hammer, a doji, a pinbar, or it could be a test and then a retest.

But first comes a zone where "everyone" can see that price is likely to stop and move away. That gets buying from some. Then comes PA that shows that the buying has been happening and it seems to be winning over selling. And that gets commitment from others. And the clearer the PA, the more people know that they have to get in now or miss out ... and you get support from all those buyers.

Anyway - that's my view of why what Strat is teaching is worth learning.


For another view, from an excellent article from a professional trader, Tim Morge, where he talks about price rejection ... this is a compressed firefox document from Morge on PA at SR

 

[candles]

For what its worth I tried something similar about 4 years ago
(Yes...even before the 'potential setups' thread. Pinbars are nothing new!) and, unsuprisingly, didn't do very well.
Its about price action at important levels rather than taking a trade because it is a pinbar.
Feel free to try it though.

 

[trader_dante]

If you cut your losses and run your winners you will make money tossing a coin for direction.

 

[hwsteele]

I would advise against trading every pin that you come across.
I like to see a pin show up at an important place in price and also in time. When that happens it works out much better for me.
I like to use pins when trading the forex. I mark off important support and resistance and then use the start of the US session to time it. I use the 15 minute chart when looking for my setups.
I don't just look for pins but three other setups also. Don't always see a setup every day but doing it this way I only spend about 4 hours a day trading.
What ever you decide to do I wish you the best!

 

[klastica]

I did a bit of back testing in oil for march and April on an hourly timeframe.
I used simple rules.
Trading between 7am and 7pm.
Placing oders above the highest point and stop below the lowest (or the other way)
If the order wasn't triggered within 2 hours I would cancel. If the order was triggered but immediately met a pin going the other way I would cancel and bet that pin.
When a bet reached 1:1 RR I would move stop to BE. When reached 2:1 I would move to 1:1.
If another pin appeared going the same way I used some unrealised profits to increase bet size still taking between 1:1 and 2:1 profit.

I made the rules before I backtested as I didn't want to make rules I as went to prove it worked. But it did work. I agree with TD you could toss a coin but in this case I was using the pin as the toss.

In 2 months of backtesting it showed 65% succes rate and most importantly winners were usually much bigger than losers.

In 2 months about £30k profit with just £10 bets and a little wargaming.

I know pins aren't the be all and end all but maybe there is something in this.

 

[omni]

I did a bit of back testing in oil for march and April on an hourly timeframe.
I used simple rules.
Trading between 7am and 7pm.
Placing oders above the highest point and stop below the lowest (or the other way)
If the order wasn't triggered within 2 hours I would cancel. If the order was triggered but immediately met a pin going the other way I would cancel and bet that pin.
When a bet reached 1:1 RR I would move stop to BE. When reached 2:1 I would move to 1:1.
If another pin appeared going the same way I used some unrealised profits to increase bet size still taking between 1:1 and 2:1 profit.

I made the rules before I backtested as I didn't want to make rules I as went to prove it worked. But it did work. I agree with TD you could toss a coin but in this case I was using the pin as the toss.

In 2 months of backtesting it showed 65% succes rate and most importantly winners were usually much bigger than losers.

In 2 months about £30k profit with just £10 bets and a little wargaming.

I know pins aren't the be all and end all but maybe there is something in this.

Hi Klastica,
What do you mean by "a little wargaming" ?
And also, why did you stop after 2months?
It is possible to code this kind of thing up, I would suggest people did this before trading the next pin bar....... backtest over 4years or so to make it valid.

 

[Hotch]

If you cut your losses and run your winners you will make money tossing a coin for direction.

Can make money cutting your winners and letting your losses run flipping a coin too

 

[mrsoul]

If you cut your losses and run your winners you will make money tossing a coin for direction.

no dice dante. Here is why: if one enters the market simply by flipping a coin, the odds of making 20 pips are, statistically, twice as hard as losing 10 pips. So, if the trade was done 3 times you would, statistically, lose twice and win once, and therefore, break even.
For this reason, you can't make money flipping coins. You really need a GOOD entry point that is statistically significant and then try to take bigger winners than losers.

If you have really found a way to make money flipping coins, by taking bigger profits than losers, please explain how you can defy the above statistics.

"It's not return ON capital; it's return OF capital".

 

[klastica]

Hi Klastica,
What do you mean by "a little wargaming" ?
And also, why did you stop after 2months?
It is possible to code this kind of thing up, I would suggest people did this before trading the next pin bar....... backtest over 4years or so to make it valid.

I did check February too and it was much the same.
The charts I use are igindex and I can't seem to get an hourly to go back more than 3 months - maybe I'm doing something wrong.

Wargaming (pyramiding) is the tactic used to add more to your bet with unrealised profits from your bet when you get the correct signal (in this case a pin).

 

[omni]

I did check February too and it was much the same.
The charts I use are igindex and I can't seem to get an hourly to go back more than 3 months - maybe I'm doing something wrong.

Wargaming (pyramiding) is the tactic used to add more to your bet with unrealised profits from your bet when you get the correct signal (in this case a pin).

You're right, the IT-Finance charts only go back 3months on the hourly.
Run it with real money, see how you get on.

 

[trader_dante]

no dice dante. Here is why: if one enters the market simply by flipping a coin, the odds of making 20 pips are, statistically, twice as hard as losing 10 pips. So, if the trade was done 3 times you would, statistically, lose twice and win once, and therefore, break even.
For this reason, you can't make money flipping coins. You really need a GOOD entry point that is statistically significant and then try to take bigger winners than losers.

If you have really found a way to make money flipping coins, by taking bigger profits than losers, please explain how you can defy the above statistics.

You seem to be assuming that one would be having a fixed stop and a fixed target (with the target being a multiple of the stop) as so many seem to do when they run this experiment.

I am talking about a fixed stop and a discretionary target so that your success depends on your skill and not the arbitrary movement of the market.

If you do this, it is relatively easy for you to make money with random entry through a coin - or in my case, I use a dice.

In my opinion, You DO NOT need a good entry point that is statistically significant.

 

[klastica]

You're right, the IT-Finance charts only go back 3months on the hourly.
Run it with real money, see how you get on.

starting on Monday with real money.

 

[hwsteele]

no dice dante. Here is why: if one enters the market simply by flipping a coin, the odds of making 20 pips are, statistically, twice as hard as losing 10 pips. So, if the trade was done 3 times you would, statistically, lose twice and win once, and therefore, break even.
For this reason, you can't make money flipping coins. You really need a GOOD entry point that is statistically significant and then try to take bigger winners than losers.

If you have really found a way to make money flipping coins, by taking bigger profits than losers, please explain how you can defy the above statistics.

"It's not return ON capital; it's return OF capital".

If you toss the coin every time the market is at an important support or resistance level I do believe making money would be possible. If you are going the wrong direction you will find out soon and can cut the loss quickly. If you are going the right direction then you would be able to let the market run with a bit more ease knowing it will most likely keep going 'til the next S/R area.
Now if you toss the coin at just any old time it would be much harder to do. Maybe not impossible but much harder.

 

[klastica]

If you toss the coin every time the market is at an important support or resistance level I do believe making money would be possible. If you are going the wrong direction you will find out soon and can cut the loss quickly. If you are going the right direction then you would be able to let the market run with a bit more ease knowing it will most likely keep going 'til the next S/R area.
Now if you toss the coin at just any old time it would be much harder to do. Maybe not impossible but much harder.

Using pins in many cases if it goes in the wrong direction the order isn't filled and thus no bet starts. So you do have a free of charge get out clause about 30% to 40% of the time when it goes the wrong way.

 

[hwsteele]

Using pins in many cases if it goes in the wrong direction the order isn't filled and thus no bet starts. So you do have a free of charge get out clause about 30% to 40% of the time when it goes the wrong way.

That's why a system beats a coin toss. Or I guess I should say that's why a system SHOULD beat a coin toss. If it doesn't then something is wrong I do believe.

 

[klastica]

You seem to be assuming that one would be having a fixed stop and a fixed target (with the target being a multiple of the stop) as so many seem to do when they run this experiment.

I am talking about a fixed stop and a discretionary target so that your success depends on your skill and not the arbitrary movement of the market.

If you do this, it is relatively easy for you to make money with random entry through a coin - or in my case, I use a dice.

In my opinion, You DO NOT need a good entry point that is statistically significant.

I can't really work out if your being serious.
I know new people come on here and they look to over simplify trading to make it make more sense (me being one such person). The fact is I have back tested this for 3 months (with oil) using certain rules. The rules involve some less simplistic methods and do involve patience and disipline. The patiance and disipline is were this may all fall down as new traders are not famed for these qualities. I hope not.
Once in each trade I do intend to use S/R, fibs and trends plus other technical analysis to influence my exits (which I believe to be more important than the entries).
The pins will simply act as my reason for entry.
I have read your other threads and I get the impression you feel at times you have created a monster with this pin bar stuff.

Anyway I start on Monday - although not risking to much I will be using real money and all results will be in my journal.

 

[CTGCollins]

Pinbars etc

Hi Klastica, I have been looking at pinbars and ordinary bullish and bearish bars and starting to develop some theories:

1. Bullish part of a candle is from the close down to the low.
2. Bearish part of a candle is from the high down to the close.
3. Net Bullish/Bearish effect of a candle = Bullish part - Bearish part (I call this the Candle effect of that candle).
4. The strength of the candle effect is proportional to the net candle effect divided by the total candle height.

Using these principles, and selecting candles with strength (rule 4 above) greater than 65% (of the candle height), I downloaded a year of daily EURUSD OHLC data and made the calculations via a spreadsheet. If the candle had a bullish effect of > 65%, I opened a long at high + 5% of candleheight + spread. The aim was to scalp just 90% of the net bullish/bearish effect, then close and take profit. If it had a bearish effect with strength of > 65%, then a short was opened 5% below the low and profit target again was 90% of the net bullish/bearish part. It was tricky calculating losses if stopped out, but I think I got it right in the end. I also ran a second experiment (columns T,U,V in the spreadsheet) where I ignored the 65% minimum rule and played every candle down to 50% (which is an exactly symetrical doji).

The results are staggering and I wonder if they can be replicated in real life. I have been failing trying to get these rules implemented into an autotrading program with GFT because it doesn't do automated OCO orders, and my work-arounds don't seem to be working anything like the spreadsheet. Results:

1: With 65% minimum bullish/bearish effect traded at UKP 1 per point: (starting with Bank of 7000- my current bank)- Net Profit 9276.95, Total Profit 13727.70, Total Losses 4450.75, Maximum drawdown 3.99%, Final balance after 1 year 16276.95
2: No minimum net bearish effect traded at UKP 1 per point: (Starting bank 7000). Net Profit 21388.50, Total Profits 25669.50, Total Losses 6037.75, Maximum drawdown -2.79%, Final Balance after 1 year 28388.50

I will be looking to automate this with the GFT CTL language and hopefully with metatrader also for further testing.

As an aside, it is interesting to look at a plot of the "candle effect" as described above against a candlestick chart. Most times if you are using breakage of trendlines on the candle effect to open and close trades there is a lot of trading and whipsawing. However, I did notice one particular formation on the Candle effect chart that looked like a perfect Head and Shoulders and a trade (short) at that point would have got you into the high of that particular new downtrend, so the H & S on the candle effect (first indicator below the candle chart) predicted the downtrend perfectly. The candle effect is definately a leading indicator.

The other indicator below the candle effect was derived by adding the candle effect to the change in closing price from the previous bar.

Regards, Chris

I can't really work out if your being serious.
I know new people come on here and they look to over simplify trading to make it make more sense (me being one such person). The fact is I have back tested this for 3 months (with oil) using certain rules. The rules involve some less simplistic methods and do involve patience and disipline. The patiance and disipline is were this may all fall down as new traders are not famed for these qualities. I hope not.
Once in each trade I do intend to use S/R, fibs and trends plus other technical analysis to influence my exits (which I believe to be more important than the entries).
The pins will simply act as my reason for entry.
I have read your other threads and I get the impression you feel at times you have created a monster with this pin bar stuff.

Anyway I start on Monday - although not risking to much I will be using real money and all results will be in my journal.