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:



Instrument: Usdchf



Timeframe: 15min



Open time:
19.06.2012 06:47:03



Close time:
19.06.2012 07:02:24



Duration: 15min 21s



Entry price:
0.95348



SL: 0.95475



TP:  0.95261



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…