Hi all, good thread going on here.
Just wondering about how you enter the trade, I’m only aware of the 50% retracement rule (especially for pin bar), are there any alternatives to this and what are they?
Maybe enter on a break of the pin bar candle?
Hi,
I also enter on the break of the pin bar high/low sometimes. It just depends on the setup really, sometimes you want to enter at the 50% level, if the pin bar retraces, which often occurs on “long-tailed pin bars”, other times you might just enter at the close of the pin bar, I do this too sometimes.
Other setups like the inside bar and “fakey setup”, have different entry methods as well.
Here is an example of some pin bars that obviously worked out very well on the GBPJPY daily chart.
I am only aware of the two different pinbar entries, either on break of high/low or on the 50 retracement. At the end of the day, setups and entries aren’t that complicated, particularly for Price Action based on one bar.
The problem with pin bars is that they aren’t consistent enough.
Absolutely agree. I would never take a trade simply because it is a pinbar, I would want a confluence of factors in my favour. So once I see a pinbar I would then start looking for other reasons to take the trade, such as rejection of a specific level, right phase of a trendline etc.
Well yea, that’s exactly right, a pin bar setup is not “just a pin bar” it takes into account the overall market conditions and whether or not any confluence is present and what level if any is being rejected. Perhaps I assume everyone treats pin bars in this manner.
On a related price action note: I think the inside pin bar setup that formed in the EURUSD today looks pretty solid.
Cool, I traded that setup and traded it, made some pips.
This week provided some pretty decent price action setups for traders who trade with price action and simple trend-following strategies.
I personally found some good entries in gold and silver, and in the EURUSD. A very good trading week for me this week indeed.
Nice going !
The chart is the USDCHF daily chart. The arrow is pointing to a “minor fakey” setup, this is a setup I recently learned from Nial Fuller.
That’s an interesting chart there. I’ve never heard of the “minor fakey” though?
Dumb question, I’m very newbie but can I use price action in scalping? I’m getting back into forex and 2 things I’m going to try and learn is p/a and scalp. Is one good with the other? I like P/A because of the cleanliness of the charts and scalping is interesting because I can sit and work with this.
Hi, yes you COULD use price action in scalping. I don’t recommend scalping though, I trade the 4hr and daily charts and I do just fine. I don’t like to sit in front of my computer all day diving in and out of the market, it’s too stressful and induces over trading / over risking. I suggest you check out the “set and forget” method of price action trading, I learned this from Nial Fuller.
A minor fakey is when the “false break” bar violates only the inside bar but not the mother bar, as taught by Nial Fuller. He also says to only trade them on the daily charts.
Here is a minor fakey:
Here is a real example of a minor-fakey setup on the GBPUSD daily chart. We can see the mother bar was also a pin bar, then we had an inside bar, then we had a false break of just the inside bar, thus completing the minor fakey setup.
Hi guys, thanks for the feedback on chart drawing.
Mindsetpips, have you considered reducing your time frame? I fear you are missing a lot of set ups by using the daily chart. I trade off the 5 min chart, this is slow enough, yes slow, to reduce noise from 1 minute chart and allows you to get involved with little risk. If a currency moves 100 pips and closes within 10 or so of the start by using the hourly chart you have missed a 180 pip movement (up and back). Not to include every little retracement along the way.
Even better if you are expecting another pin bar on the daily use this to your advantage and buy and sell at the high and low points.
Pin bars often set up nice channels on the 5 min chart and because, essentially, they show indecision in the market, they will range very well. You could trade on literally hundreds of pips a day, rather than wait for your signal which is possibly going to be wrong.
A lot of beginners fear the short time frames because they perceive them to be too quick. Just sit and watch a 5 min chart, you will soon see how slow it actually is. It takes 15 minutes to form a 3 bar reversal pattern, this is enough time to be looking at all the relevant data to make a trade.
Also due to the volatility of a 5 min chart, on a 100 pip move day you might have 400 pip movement. With tight stop losses, you can be 50% wrong and still make more pips than on the daily chart.
You only need a couple of hours a day to watch the market.
Another problem with technical traders is their ignorance of news, I have learnt this the hard way and now place the news above any technical indicator. Do you read the financial times? Can you quote the interest rates for USD, GBP, EUR and AUS off the top of your head and know how a rates change would affect them? This is the important stuff. An interest rate new release will blow any pattern out of the water no wonder how wonderful the set up is.
If you focus purely on technical you are seeing less than half the picture and are not really trading, you are essentially gambling on the outcome of a pattern.
Also remember to make your own judgement on everything, I have read a lot of Nial Fullers stuff and is generally good but he has some theories which are exactly what brokers want beginners to do, to take their money. For example using a 3:1 risk:reward ratio. This is nonsense, I say this from experience and speaking with FOREX traders who work for banks doing this for a living. If you look at it statistically there is less than a 33% chance of hitting your take profit. It is much more likely that a good trade will reach half way and then retrace and hit the stop loss or simply hit the stop loss because the trader has had to use a stop loss that is too tight to enable a 3:1 ratio.
Good luck with your trading any questions give me a shout
Nice post. Money management and risk management are essential if you want to succeed in the long run.