You’ve seen the videos-- you know-- the FOREX “expert” who has the secrtet “pin-bar setup” that only they know how to use. How many of those setups can you spot on this chart?
So, how would this “strategy” have worked out if you have followed their advice? The result would have been four stop-outs and a lot of frustration on your part.
The moral of the story? There are three takeaways, really:
Be careful who you get advice from, especially if they spend a lot of time making vids on YouTube. This means they are probably living in their mom’s basement and have nothing better to do with their time.
While a pin-bar can be a good indicator for a setup, you need to look at the context first. In this case,you have a tight bull channel with weak pullbacks. You should not be shorting anywhere on this chart. Instead, buy the bear bars and place your stop at the last lower high.
All reversals need follow-through. Don’t just ely on one signal bar to make your decisions. Sure, you will be giving up some profit, but you should be going for higher-probability setups. That way, you will get stopped out less frequently, and you won’t need to go for the 1:10 trades anymore.
May I suggest a fourth? All the losing examples you’ve shown above are upward-pointing pin-bars in an uptrend. A filter as simple as a 30-bar moving average would exclude the lot.
I find pin-bar signals one of the most reliable simple candle signals there are - but they do naturally need a directional filter.
I’ve heard that argument before. But what is “noise,” exactly? I’ve heard traders tell me that it is merely random price movements on the chart. However, this is incorrect. Every tick on every chart is being traded by someone (either manually, or via algorithm) to make money. I would hardly calll that "random.’
Others may say that “noise” means the chart is in a state of confusion with a lot of dojis and pin bars all over the place. It might be a tight trading range containing a lot of misdirection and confusing price action. Maybe a chart that looks like this:
Not only is the PA ugly on this chart, but there are gaps everywhere that makes it even more difficult to read. This can be construed as a “noisy chart.” The truth is, all charts, no matter what the timeframe, can often look like this one, which happens to be the weekly chart of the GPB/USD.
The point I’m trying to make is that, while you and I may not want to be in during these times, there is still a lot of trading going on here we don’t know about. And if you understand price action at a professional level, you can gleen a lot of information from all this “noise.”
If i told you,I’d have to…
