Yes. If I worded it better the first time, I would have said that I would have waited for price action to make it’s move for entry. When trading, you first should look for bias. Is price going up or down. When you believe you have a particular bias, you want to confirm the bias. In this case the pin bar was good confirmation. Then you want to make your entry.
Keep in mind, pin bars do not always indicate where price is going right away. If you solely traded pin bars, I would venture to say that it would equate to a negative expected value.
Thus the importance of waiting for price to move in the same direction of your bias prior to making your entry.
Remember, you just want a piece of the move. Much easier to do that, as opposed to attempting to capture the entire move.
It’s been a bit since I’ve done something in this thread. Got a bit bored tonight and decided to post a possible trade. If you already have been through this thread, you know I prefer to post trades in action as opposed to teaching on prior events.
So let’s have a gander at this set up.
What initially caught my eye was the bearish candle on the 50% Fib line. Looking across I saw that there was a visible line of support/resistance that I marked with a red horizontal line. Drawing a trend line, the following candle screamed downward and looked as if it had no business even thinking about retesting the trend line.
This is brewing up to be a nice continuation of the current downtrend. So it’s time for action. I’ve placed a limit order at 10 pips below the low of that huge bear candle. And I placed my stop loss 10 pips above the line of support/resistance.
I’m giving this trade 24 hours to break the low and enter me into the market. If it doesn’t, price clearly isn’t ready to go down yet and I’ll have to reassess what’s going on or move onto another pair.
If this drops, I’ll be looking to get a couple hundred pips outta the deal.
The set up never triggered. It could still go down, however, thus far it looks like it’s going to lack the momentum I like to nab the amount of pips I’m looking for.
I am very new to this (August '09). I don’t post much but I read and study live charts A LOT. With a bit of courage I am going to post a live trade that is somewhat working out for me right now.
If you look at the chart you may notice there are two very thin green horizontal lines around the 6218 level. I plotted those two days ago identifying them as possible demand zone based on the fact that they were former supply areas. Notice how on 13 Jan at 0800, price broke the 6218 level (previous supply), so I marked it as a possible future demand area.
Price summited at 6355, a long bearish candle formed so I decided to get my newbie butt in gear and deliver the seasoned traders’ their laundry / errr umm…I mean plot a fibonacci and look for possible pullback levels from 23% down to 50%.
A nice pin bar formed in confluence with my demand level and the 23.6% fib level. I posted ONLY THEN THE RSI to get a better picture and give me more reason to go in. When I did that I had a HL chart and a LL RSI (hidden bullish divergence). I went long.
So, the evidence was stacked with two/possibly three reasons to place the trade:
a. Pinbar at confluence of 23% fib and resistance turned support. Kind of two reasons actually.
b. Hidden bullish divergence.
I’m up 36 pips right now with 19 minutes left in the session. SL moved up to 6237. I don’t know if if I should let it marinate over the weekend.
Please critique. I need to hear the negative more than the positive.
Your logic for your set up was excellent. You didn’t just jump in on a whim. A reason presented itself to you and you backed up that reasoning with more technical analysis. Well done.
I’m not clear on where your entry exactly was, it sounded as if you saw the hidden divergence and went ahead and pulled the trigger. Correct me if I’m wrong.
Personally, I like to wait until price breaks above the high or the low of the candle that has my interest. I used to jump in off the “signal” candle, but have been burned when price just could not quite break out from the candle in the direction I was looking for it to go.
So for me, find the set up. Don’t trade off the set up. Rather get into the trade after the price has shown that it’s moving in the direction you want to go. It’s easy to count all the missed pips, which in turn gets traders to attempt to ride the wave from the beginning to the end. That way of thinking however burns more traders than not.
I’d rather just take a piece of the movement.
Also, once in the trade, what was your exit strategy? Where did you believe price was willing to go and how many pips did you intend on taking?
I commend you for your existing knowledge of the market. New traders tend to seek the Holy Grail and are busting their first account before they can even say Price Action.
Here’s one that worked out for me. Right now I am at +25 pips. This pair has been ranging since last monday.
I noted the demand line yesterday around the 9197 level and considered it between that 9197 level and down another 15 pips to the 9183 level because of the “bounce” at the pinbar way back on 12 Jan around 1800GMT and notice how the demand level flowed through the rest of last week’s lows (see daily and 4h charts for multiple time frame analysis).
My next step is to see if I have enough room for profit. So, I measure the difference between the most previous high from the demand level with respect to range between my proposed stop loss and my proposed entry. Is it about 2:1 reward to risk? Yes. FOR ME that is good to go.
I placed my entry at 9210 with an initial stop just below demand zone. I chose that entry because I wanted to see the price break not only the 9197 level but above that consolidation area that occurs on 12 Jan between 1700 and 2300GMT. Take profit right at 2x’s the risk. (I later cheated and moved it a bit).
There it is. No indicators. Just some horizontal lines and what I learned for free in this thread, some free webinars and others like it.
I have another (usdchf) going right now, but it just started to develop.
I am very new and only demoing. This is a developing passion for me so I appreciate any critique of what I’ve done as I attempt to develop my own method.
I got stopped out at 9231. It wound up being a 20 pip win. This leads me to believe I need work on my stop losses. Not sure about that yet…
Also, I would like to know if anyone knows of a “signal service” that alerts you as to when price is reaching a certain level. I’m not looking for someone’s fly-by-night signal service for their million dollar strategy. I just want something simple that can alert me of price levels I’m looking for. For instance, if I am looking for an entry of 1.2345, if I input it into a program it will shoot me a text message (or something) when it’s 15, 20, 30 pips or whatever away from it. Anyone understand and know of something like that?
Hi Gravitas,
if you can’t use the alert feature in Metatrader (thats best IMHO) you might check this one that I’ve use in the past (its free): alertfx.com
Only problem is that their pairs are limited and system is a little clunky.
Oh ok. I thought the mt4 only sends alerts to your platform mailbox. I was looking for something that can send messages to my phone. I’ll look into that. Thanks!
Don’t be so quick to discount your win. You took 20 pips out of the market. You took money from the market. Most can’t even do that. With your trailing stop you were protecting yourself from any significant loss.
With that said, I don’t use trailing stops as I find that I could have almost always closed out the price at a much higher level.
At times I close out my trade too early and the trade keeps moving. The nice thing is that nothing is stopping me from re-entering the trade, provided I find a viable entrance.
Well now I’ve done it. Got myself in a bit of a pickle.
First short entry was at .9486. Then I added another position at .9484. So I’m 2 units into a losing trade. My stop loss is at the 100% Fib line.
So how do I get myself outta this jam? I could panic and just close out both trades. I can also just let things run its course and pray it doesn’t hit my stop. Or I can manage this with the least amount of damage possible.
Off hand price looks to be in a continuation pattern. This doesn’t work for me at all. I, however, drew Fib lines to get a better understanding of what price is doing. Pricing hasn’t yet closed above the 61.8. If it does, I intend to move my stop to 10 pips over the high of the candle that makes that close.
While this does look to be in a continuation, it’s possible price could head back in my favor by failing to make it past the golden ratio. Now I’m no fool. I’m expecting to take this at a loss. However, I am putting myself in a position where I can minimize my loss, effectively increasing my overall profitability.
Just the same chart that MasterGunner99 used above. I drew couple of trendlines to see how price action behaves in those areas. MasterGunner99 I hope you can make it in this trade. Let us know how it turned out to be.
