Forex92
New member
The Pin Bar: A Forex Trading Powerful Price Pattern
ONE OF FOREX TRADING'S MOST POWERFUL PRICE PATTERNS
Tired of attempting to scalp and being scalped by the market? Maybe the 1-Minute and 5-Minute charts are too fast. Even for the most seasoned professional traders, trading those shorter timeframes can be challenging. In order to boost their winning rate and profits, many inexperienced traders simply step back and start trading daily, 4 hour, and 1 hour charts. Trading off higher timeframes is less stressful for inexperienced traders since they don't have to sit in front of the computer and watch price move against them, then for them, and then against them again.
Traders fresh to larger periods may find it challenging to adjust at first. First, longer timescales demand more patience. Price pattern set-ups will be less common, and gains may be slower. Trading larger timeframes is not as “exciting” as trading smaller timeframes tick-by-tick. However, standard technical analysis informs us that higher timeframe signals are more credible than lower timeframe signals since they are produced by a wider amount of data. The Pin Bar is one of the greatest probability trading strategies in the FX Market.
PIN BAR HISTORY
Martin Pring discusses the “Pinnochio Bar” in his book Pring on Price Patterns. Indicators of reversal include the Pinnochio Bar (pin bar) and the Pin Bar (pin bar). Here is an image of a pin bar:
Pring named this candle after Pinnochio's nose. Consider the image above a 1 Hour Candlestick. During the 1 Hour trading session, it appeared like bulls had entire control of the market, but sellers were able to swoop in with a vengeance and not only stop buyers from pushing price higher, but also take complete control of the trading period. A red candle indicates that sellers are in complete control of the market. Sellers were able to bring price below the period open, erasing all gains achieved by purchasers.
The candle's psychology is that price “lied” to us. It tried to convince us it was going up, but it ended up going down, hence the name “Pinnochio,” or pin bar. When formed correctly, pin bars are a significant reversal indication.
PIN BARS ARE NOT CREATED EQUAL
The best pin bars close below the open, or above the open, depending on the wick's direction. As shown in the image above, the candlestick closed 1 hour trading session below the open, resulting in a red candle. That's what you desire. The candle should close red if there has been a nice price move up and the pin bar forms at the top of the move with a big wick to the upside. If price has performed a nice downmove and a pin bar forms at the trough of the move, the body should close green.
A pin bar that does not close in this manner is still acceptable, but the best will. Remember that trading only the greatest pin bars increases your chances of trading success.
A pin bar's body cannot be more than 20% of the wick's length. So, if the body is 8 pips and the wick is 25 pips, the candlestick is not a perfect pin bar. For example, if the wick to body ratio is 100:1, the body should be 20 pips. It can be a few pips more, but it should be 20 pips or less.
The nose should be short. If the nose is too long, the candlestick becomes a doji, which has a small body and equal wicks on both sides. A ideal pin bar has a long wick on one side and a short or no wick on the other.
Location is vital. Pin bars should not be traded in a market that is consolidating. Pin bars form during consolidation, but these signals are less reliable. No candles should be directly left of a pin bar wick. There should be solely open space. Examine a few images.
DON'T TAKE!!!!!!
The pin bar should also form in a vital region of support/resistance. You don't want to exchange them at random. They should form on critical areas of technical support/resistance. A price reversal should be confirmed.
ENTRY/EXIT
Entry is always 2-3 pips beyond the nose break and stop loss is always 2-3 pips beyond the wick tip.
Pin Bars aren't a magic formula that will automatically make pips. In simple terms, they are a price pattern that, when properly traded, can produce high probability FX set-ups.
ONE OF FOREX TRADING'S MOST POWERFUL PRICE PATTERNS
Tired of attempting to scalp and being scalped by the market? Maybe the 1-Minute and 5-Minute charts are too fast. Even for the most seasoned professional traders, trading those shorter timeframes can be challenging. In order to boost their winning rate and profits, many inexperienced traders simply step back and start trading daily, 4 hour, and 1 hour charts. Trading off higher timeframes is less stressful for inexperienced traders since they don't have to sit in front of the computer and watch price move against them, then for them, and then against them again.
Traders fresh to larger periods may find it challenging to adjust at first. First, longer timescales demand more patience. Price pattern set-ups will be less common, and gains may be slower. Trading larger timeframes is not as “exciting” as trading smaller timeframes tick-by-tick. However, standard technical analysis informs us that higher timeframe signals are more credible than lower timeframe signals since they are produced by a wider amount of data. The Pin Bar is one of the greatest probability trading strategies in the FX Market.
PIN BAR HISTORY
Martin Pring discusses the “Pinnochio Bar” in his book Pring on Price Patterns. Indicators of reversal include the Pinnochio Bar (pin bar) and the Pin Bar (pin bar). Here is an image of a pin bar:
Pring named this candle after Pinnochio's nose. Consider the image above a 1 Hour Candlestick. During the 1 Hour trading session, it appeared like bulls had entire control of the market, but sellers were able to swoop in with a vengeance and not only stop buyers from pushing price higher, but also take complete control of the trading period. A red candle indicates that sellers are in complete control of the market. Sellers were able to bring price below the period open, erasing all gains achieved by purchasers.
The candle's psychology is that price “lied” to us. It tried to convince us it was going up, but it ended up going down, hence the name “Pinnochio,” or pin bar. When formed correctly, pin bars are a significant reversal indication.
PIN BARS ARE NOT CREATED EQUAL
The best pin bars close below the open, or above the open, depending on the wick's direction. As shown in the image above, the candlestick closed 1 hour trading session below the open, resulting in a red candle. That's what you desire. The candle should close red if there has been a nice price move up and the pin bar forms at the top of the move with a big wick to the upside. If price has performed a nice downmove and a pin bar forms at the trough of the move, the body should close green.
A pin bar that does not close in this manner is still acceptable, but the best will. Remember that trading only the greatest pin bars increases your chances of trading success.
A pin bar's body cannot be more than 20% of the wick's length. So, if the body is 8 pips and the wick is 25 pips, the candlestick is not a perfect pin bar. For example, if the wick to body ratio is 100:1, the body should be 20 pips. It can be a few pips more, but it should be 20 pips or less.
The nose should be short. If the nose is too long, the candlestick becomes a doji, which has a small body and equal wicks on both sides. A ideal pin bar has a long wick on one side and a short or no wick on the other.
Location is vital. Pin bars should not be traded in a market that is consolidating. Pin bars form during consolidation, but these signals are less reliable. No candles should be directly left of a pin bar wick. There should be solely open space. Examine a few images.
DON'T TAKE!!!!!!
The pin bar should also form in a vital region of support/resistance. You don't want to exchange them at random. They should form on critical areas of technical support/resistance. A price reversal should be confirmed.
ENTRY/EXIT
Entry is always 2-3 pips beyond the nose break and stop loss is always 2-3 pips beyond the wick tip.
Pin Bars aren't a magic formula that will automatically make pips. In simple terms, they are a price pattern that, when properly traded, can produce high probability FX set-ups.
