Hi guys, on EURGBP daily, a solid pin bar is formed. But the nearest support seems to be at 0.815.
Thinking for a good setup, shd the entry price be somewhere in the middle of the pin bar?
Any comment is appreciated. Many thanks!
What would you say about this level it formed at and swing low/high etc?
Hi Johnathon
The level 0.82208 which the pin bar got rejected is a recent swing low in early Jan12. We can also see that price respects this level in the past few days.
In addition, we would be selling into downtrend which is good.
If the entry price is in the middle of the pin bar, it would give a reward risk ratio close to 2 and we are also shorting at the upper end of the downward slopping channel.
This is about all I can see. Not sure whether I answer your question.
Yes I think we do have a different way of thinking for sure! We both trade PA just in different ways, for example I watch trendlines and patterns closely as well.
Indeed the NFP can be another doozy, nice for trading spikes if youāre a scalper otherwise best avoided imho
I hear you on the whole news though, too many people get hung up on it all.
Cheers
Yes agree with strong recent trend and also agree rejecting resistance.
What I am asking is are you not worried that this is formed at a swing low? And where we would expect buyers to look to buy? (Buy low sell high, and sell high buy low etc)
Johnathon
I am afraid I am lost on this part. I thought the swing low which acts as a support in the past has become a resistance when the pin bar is formed yesterday. From the chart, I donāt know how to see where buyers would look to buy.
If I am bullish on this EURGBP, probably I would wait for price to come towards 0.815 (where it reaches support and lower portion of the channel) before buying it.
Okay, my personal rule is to only trade reversal candles as reversals. So when I trade a Pin Bar I am always looking to pick a reversal in price. This means that if I am looking to pick price to go short it has had to have been trading higher. This way when I go short I am trading from a swing high. This does two things. It make me not sell straight into trouble and I am also selling high and buying low.
When we trade reversals from the incorrect swings we will always be selling into trouble as they will be sitting on a support or resistance area.
So the EURGBP for me is formed at a swing low and because of this a no trade. Okay that being said I am NOT saying it will not go lower. That I am def not saying. As we said it is with trend and bounced of resistance level I am simply saying I only place trades where the edge is overwhelmingly in my favour.
An example of what I am talking about is chart I put below. Do you see how the pin below is from a swing high and selling high and buying back low? And because of this not selling straight into trouble. If you look at chart I put up about EURGBP price is selling straight into trouble. And it always will be when you sell from a swing low.
Does this make sense?
Now lastly a DO NOT change orders or take trade of because of what I have said! I only post like this knowing that people will not change their trade ideas. If they do I will have to stop as it is not trade advice but rather something to think of next time.
Good luck,
Johnathon
Hello All,
Any comments on AUDJPY (pin on daily)?
It is a bit small.
Thanks
Johnathon
Thanks for the quick reply. It is enlightening as I have never considered this in my selection criteria for trades.
Unfortunately, I am not fully enlightened yet. Will sit down and digest this again.
Thank you!
AU hitting an interesting resistance level at 1.03848
U guys may wish to monitor closely for price action to enter into short position. Too bad, I am stepping out soon. Never seem to have any luck with this pair. Signā¦
Hi bitizhu,
I believe youāre talking about the pinbar below.
Actually, this is also under the category of discussion that ywboo3 and Johnathon have been having.
The catch is: the pinbar has not formed at SWING LOW; if, say, the body of the pinbar was at the support line, with the tail stretching out downwards, and it had closed within a previous candle, that in my opinion would have been a valid setup.
As Johnathon said, trading this kind of pin (like the one below) would be trading right into an S/R zone. It may work out a couple of times but in the long run will punish you more than it rewards.
Took me some time to get it too 
and sometimes i forget and begin to get excited, then realize itās a fake (or have someone point it out to me). Johnathonās written a pretty good article about PA that sucks traders in, check it out here: Price Action That Sucks Traders Inā¦ | Forex School Online
Bottom line: SHORT from RESISTANCE (swing high) and LONG from SUPPORT (swing low)
Cheers!
Thank you very much, Dudest!
Makes lot of sense. I was attracted by the Support and did not pay attention to the Resistance above.
I was lucky, managed to move the SL to BE.
Will read the articleā¦
Safe trading to All
Hi friends,
Iāve a question about swing high/low,
And try to ma,e it with an example:
Look at audusd right now, 4H,
(i cannot upload image coz iām with the ipad and iām not yet able doing this),
Now it is forming a beeb,
Yes, we wait till the close of candle, but the question is:
If this candle close as a beeb, is correct to say that it is at a swingh high?
Yes that is correct.
Hi Dnagolf!
Would not you be worried that on the Daily was a PB from the Support?
And on my opinion BEEB is not so nice, because of the upper wick.
Any comments from our colleagues?
Hi bitizhu,
The pin you pointed out, is at a spport, but in a very strong down trendand itās near 1.4000, BRN and recent resistance area,
So, i think that IF it close as beeb, iāll consider to trade her breakout short.
This will be my last post for a few days as travelling.
For me looking at the daily chart I would only short if price was a little higher from a more important and logical area.
Safe trading all,
Johnathon
bitizhu I think Dudest covered this very well (nice post dudest) but there is one thing you can answer straight away that almost automatically cancels out the trade (for me at least).
As soon as you mention it is small, before anything else then we have a major problem. As Price Action traders one of the first things we need to check off the list is that is LARGE PA
Once you can recognize that the PA is quite small it already has a fairly significant tick against it. Dudest has pretty well covered the rest.
For what it is worth here are the [I]FIRST 3 things[/I] that have to have a tick on my trading plan before I can even [I]consider[/I] taking a trade.
- Is price at a significant S&R level?
- Is there LARGE PA?
- Is it at a swing high or swing low?
Unless I get [B][I]all 3 ticks[/I][/B] there then I donāt go on to the next stage, which is to look at trade management, is it with the trend or counter-trend, how many lots etc. At this point it is a ānoā trade.
Safe trading everybody.
Yep and at the same time if someone knows themself itās small they already know they shouldnāt take it. They would be just convincing themselves.
I agree with you john, when you say to look at the daily,
But iāve marked a level little lower,
Look at todays max, 1.0394, how many times it reacted in the past,
From last year around end of april, so if daily close with a pin i surely short it!