Secret of Live "pinbar" Trade on 15min Chart Is Revealed
I reveal the secret of this live trade using price action “Pinbar” strategy. Most of traders have heard about Price action trading using what is commonly called: “Pinbar”, but only few people know how, when and where to trade this strategy.
Settings of this live “Pinbar“ trade on 15min:
Open time: 19.06.2012 06:47:03
Close time: 19.06.2012 07:02:24
Duration: 15min 21s
Entry price: 0.95348
Profit: 9 pips
How to recognize a good “Pinbar“
3 major criterions are to be taken on account for the recognition of a good “Pinbar”:
1. The height
The ratio of the body’s height and the tail’s length of the candle or bar chart have to be compared to his height.
For a good “Pinbar” setup the body of the candle or bar chart has to be in the 1/3 part of the whole candle or bar chart. When the candle or bar chart exceeds 30% it’s less accurate. Thus, the smallest the body is and the longest the tail the best is the “Pinbar”.
2. The color:
It shows market sentiment when the session ends. At the resistance area, like in the example, red is the best color. Because bears have pushed the price below the opening price of this session. At the closing of the session the candle or bar chart is red, this gives a better sell opportunity than if it has been green.
3. The session opening and closing price:
In our live trade example, the opening price is the same than the previous session closing price; that means there is no gap. If the price opens below and closes above previous session, you should avoid selling because it is a bullish engulfing pattern. A better setting for entering a short is to have the price open above and close below the previous session, which is called “Bearish engulfing pattern”.
Aggressive entry vs. conservative entry
The safe entry signal occurs when in the following sessions the price closes below the “Pinbar” lowest price for short entry or above for long. This is the conservative strategy. Unfortunately, this setting makes traders miss several good trading opportunities. The reason is the amount of systems waiting for such an awesome to entering a position. Most of time, nice “Pinbars” are followed by huge candles or bars charts, known as “Momentums”.
Nevertheless, aggressive traders will enter a trade at the closing of the candle or bar chart like in our live trade 15min example using price action “Pinbar”.
Suitable set up for this trading strategy
Range markets or sideway markets fit well for this price action “Pinbar” strategy. But when the market is unbalanced may lead to losses while trading against the current. Hence, it is very important to increasing the probability of a successful trade.
Bonus: A trade made the same day on Usdjpy
I can continue this article with this second won trade analysis, but it’s another trading story…