[QUOTE=“EternalNewB;556036”]EURAUD 8 hour pin bar 8 Hour pin bar formed as reversal on the EURAUD Pros: * nice pin bar size * high time frame (8 hour) * at previous swing low Cons * closed directly on resistance 1.4363 * too much noise on the left Rating 2.5 stars Overall RR 1.6 for me (TP @ 1.4285) Would appreciate your input <img src=“301 Moved Permanently”/>[/QUOTE]
Eternal, so i ask this to learn strategy on how to enter a trade. After that pinbar finishes forming, what do you do?
Do you set an entry a few pips below the pinbar candle?
Do you always set stop loss at top of pinbar candle?
My broker offers a very limited number of pairs (I should change it I know) so I do go over each one of them quickly to check for potential setups.
My current trading plan allows me to trade only pinbars on TF smaller than daily so I just quickly switch TF looking for something that looks like a pin bar
So I found that one fairly quickly however I was very concerned about it due to the noise on the left. After I saw it on your twitter page I was like “What if Aaron was setting me a trap to see if I am going to do my own analysis or just jump in ?”
Thus I started analyzing, I forgot to add to the above that the volume also confirms the pin bar
My entry point is at retracement 1.4392 my TP is 1.4285 and my SL @ 14430 (I would appreciate if you could give me your opinion on these)
EDIT: my order was triggered while writing this reply, fingered crossed :51:
Following CK’s teaching’s you have 2 ways to enter a trade
5 to 10 pips below the pin bar (depending on the time frame 5 form 4/6/8 hours 10 12h and for daily) this is the safe wait since you have confirmation that that the pin bar was broker
at about 50% retracement of the pin bar (aprox middle of the wick), this gives you a much higher Risk Reward ration but it is, of course, more risky but it you can risk less since the RR is much higher
for the SL I set it also 5 to 10 pips above the pin bar depending on the time frame
CK if I forgot anything or got it wrong please do chime in
I would have to agree the quality was somewhere in the 2.5-3 star range. The volume showed a little bit, but it wasn’t super obvious. Some of the things I really liked about this trade, and some were “meh”. I definitely don’t want to be telling people to take trades, not only does that counter-intuitive to learning, but it could get me in legal trouble. I will post trades where price is in a key area, and also where a setup is forming or has formed. But it doesn’t mean I personally have taken the trade, just something worth looking into for further analysis. If your retrace was at 1.4393 then that means you are in the trade now. That was a good area, or maybe a little lower. There was a good retrace entry around 1.4368 also. Both 1.4285 and 1.4130 are fairly major daily S/R levels and good candidate for TP. I’ll leave it up to you do decide what the best way to manage that trade would be. I hope it goes well for you!
[QUOTE=“EternalNewB;556052”] Hey CK thank you for the kind words My broker offers a very limited number of pairs (I should change it I know) so I do go over each one of them quickly to check for potential setups. My current trading plan allows me to trade only pinbars on TF smaller than daily so I just quickly switch TF looking for something that looks like a pin bar So I found that one fairly quickly however I was very concerned about it due to the noise on the left. After I saw it on your twitter page I was like “What if Aaron was setting me a trap to see if I am going to do my own analysis or just jump in ?” Thus I started analyzing, I forgot to add to the above that the volume also confirms the pin bar My entry point is at retracement 1.4392 my TP is 1.4285 and my SL @ 14430 (I would appreciate if you could give me your opinion on these)[/QUOTE] I would love to see an article or just a post on this type of entry. Is this a normal entry? I see you entered well above the body of the pinbar? What is the logic behind that. It seems to me you can take more profit by doing this, but what if that move up is a signal of price just getting higher? And what if after the pinbar price just drops? Being the beginner, im sure im missing something here
Edit: Nevermind, as my question has been answered. Thank you eternal
There are a lot of “what if’s” in there. Every trade has a hundred what if’s, your job as a trader is simply trade in a way where your long term wins(in $'s) outperform your long term losses(in $'s). I won’t leave you with that lame answer though, let me expound.
The pin bar itself is “the signal”. If we as price action traders are waiting for confirmation of a false break at key S/R levels, then the price action candlesticks are the confirmation. Waiting for price to break the end of the candle is safer, but the candle itself is the confirmation we are looking for. So here’s the logic behind it, when a false break occurs price rarely just immediately reverses direction. The price action candle shows an immediate rejection of further price movement, but for the reversal to actually happen the market as a whole has to have a shift in supply/demand. This can take hours or days.
In the meantime you will see price move up and down inside of the range of the price action candle, while the shift is occurring. Often times price will run into resistance in that candle area, and these are good places to put an entry order. It’s easier to explain with pictures which I will do sometime this weekend. I will be the first to state that retracement entries will lower a traders win rate. But here is why it’s ok, if you regularly shoot for 1:1 or 1:2 trades and have a 65% win rate, taking a retracement may drop your win rate to 40-50% but you may be regularly achieving a 1:4 or 1:5. If you do the math on those 2 types of traders, the trader taking lower win rate for higher RR can achieve much higher earnings. This is why high win % is purely a myth.
The side note here is that you will need to be disciplined to achieve a good win rate with the retracement entries. Retracements are much less forgiving, and even more so at low timeframes. I think it is a good way to trade(or else I wouldn’t do it), and I know other traders want to learn more about it, so I will put it on my list to write a thorough article on it in the near future.
[QUOTE=“krugman25;556074”] There are a lot of “what if’s” in there. Every trade has a hundred what if’s, your job as a trader is simply trade in a way where your long term wins outperform your long term losses. I won’t leave you with that lame answer though, let me expound. The pin bar itself is “the” signal. If we as price action traders are waiting for confirmation of a false break at key S/R levels, then the price action candlesticks are the confirmation. Waiting for price to break the end of the candle is safer, but the candle itself is the confirmation you are looking for. So here’s the logic behind it, when a false break occurs price rarely just immediately reverses direction. The price action candle shows an immediate rejection of further price movement in a direction, but for the reversal to actually happen the market as a whole has to have an overall shift in supply/demand. This can take hours or days even. In the meantime you will see price move up and down inside of the range of the price action candle, as the shift is occurring. Often times price will run into little resistance areas in that candle area, and these are good places to put an entry order. It’s easier to explain with pictures which I will do sometime this weekend. I will be the first to state that retracement entries will lower a traders win rate. But this is why it’s ok, if you regularly shoot for 1:1 or 1:2 trades and have a 65% win rate, taking a retracement may drop your win rate to 40-50% but you may be regularly achieving a 1:4 or 1:5. If you do the math on those 2 types of traders, the trader taking lower win rate for higher RR can achieve much higher earnings. The side note here is that you will need to be disciplined to achieve a good win rate with the retracement entries. Retracements are much less forgiving, and even more so done at low timeframes. I think it is a good way to trade(or else I wouldn’t do it), and I know other traders want to learn more about it, so I will put it on my list to write a thorough article on it in the near future.[/QUOTE]
Thanks for the explanation. Makes perfect sense. Looking forward to more great info
What’s your view on leaving trades over the weekend? Personally I’ve always preferred to close them in case of price changes during the weekend. But today is the first Friday that I still currently have a trade open and I’m down on pips (usually I would close it by now if I was in profit) providing my stop loss isn’t hit, would you keep the trade open? Or close it for the weekend and re-open it at the start of the next trading week?
I would consider retracement entries a more advanced topic. There are a lot of traders here that have been trading for a while and are digging into the more advanced topics of price action, but have never learned about retracement entries. Due to their extra risk, and the extra psychological stress they can cause a trader, I will probably hit on the topic thoroughly in both threads. Since this thread is allowed to go as low as 30 minutes TF candles, it may be even more important to discuss here. I understand your concern though and will continue to try and keep topics in their respected threads.
I really really hate leaving trades open into the weekend, but I will do it in certain cases. If you have a euro open and something crazy happens over the weekend, you may see a gap of 500+ pips. If you had a stoploss of 50 pips and were risking 3%, that means if it gapped against you, you would say bye bye to 30% of your account in 1 trade. This may be an extreme example, but it wouldn’t be that unusual to even see a 100 pip gap. I don’t have a hard rule set but generally if my trade is way in the money, I don’t even think about it. If my trade is just at break even or in the red, if I have a small % of my account at risk I leave it open. If I have a large % risked like 3-5% of my total account, I will either close part or all of it. Also, if your trade is in the red and you are going to hold it into the weekend, consider moving the SL up/down 20-50 pips. I have seen spreads shoot up that much in the first few minutes, because of ultra low volume. It sucks getting your SL hit because of huge spread, even though price hasn’t even moved. I am in a trade right now that is in the red, but I have quite a low amount of account risk on it(around 0.5%), so I am going to leave open over the weekend.
I really really hate leaving trades open into the weekend, but I will do it in certain cases. If you have a euro open and something crazy happens over the weekend, you may see a gap of 500+ pips. If you had a stoploss of 50 pips and were risking 3%, that means if it gapped against you, you would say bye bye to 30% of your account in 1 trade. This may be an extreme example, but it wouldn’t be that unusual to even see a 100 pip gap. I don’t have a hard rule set but generally if my trade is way in the money, I don’t even think about it. If my trade is just at break even or in the red, if I have a small % of my account at risk I leave it open. If I have a large % risked like 3-5% of my total account, I will either close part or all of it. Also, if your trade is in the red and you are going to hold it into the weekend, consider moving the SL up/down 20-50 pips. I have seen spreads shoot up that much in the first few minutes, because of ultra low volume. It sucks getting your SL hit because of huge spread, even though price hasn’t even moved. I am in a trade right now that is in the red, but I have quite a low amount of account risk on it(around 0.5%), so I am going to leave open over the weekend.[/QUOTE]
Thanks Aaron really appreciate this. This is a topic I have been unsure about, I’ve often wondered if the market gaps whether it could potentially gap past my stop loss costing me more, which I think you’ve confirmed. Im currently sitting on the AudNzd 1hr pin bar from earlier today which I really fancied but as the pair can move so slowly, not much has happened, it’s retraced a little to the point where if this was Tuesday I’d be expecting it to drop in my favour. I will sit on it until just before the end of the trading week and then close it whether I’m in or out of profit. Sounds like the safest bet and will teach me to think twice before putting a trade on, on a Friday.
I know you are against taking profit as a trade progresses and must admit I have always thought the same, wondered what you thought of one and done.
Open two positions one with a TP at 1:1, then ride the SL of the other position on supporting PA.
You don’t move the second position to BE so it gives the trade more room to breathe, taking one off at 1:1 makes it a scratch overall if the second postion’s SL is hit but once the second position’s SL is >= 1:1 the overall trade is 1:1 without a capped potential.
Obviously only appropriate in certain circumstances (not trading a range or into strong higher time frame S/R for example).
My only concern is that it is somewhat over half day and since it is friday you could get caught in profit taking or market gap.
Thus safer would be to wait for monday. Anyway just thought to mention it but since you are in it, I wish you the best.
[QUOTE=“EternalNewB;556137”] Although I refrained from getting too enthusiastic and jumping in without analysis I totally forgot it was Friday and I could be gapped big time Well what’s done is done just hope the lesson won’t be too expensive Cheers[/QUOTE]
So i have 2 questions.
#1. Should I just stay away from making a trade after i wake up on Friday’s here in the U.S.? The pinbar on this trade closed at 9am NY time and we are already talking about how its Friday afternoon and this was possibly a bad trade to make. Could you really expect anything to come of the trade between 9am and noon? I would just like to know if i should plan on having my last trades of the week come no later than say late thursday night prior to sleeping.
#2 what exactly is this gap? From what yall are saying, im understanding that price could move big over the weekend and your SL gets ignored until Monday? If thats true, why does it not stop you out at what you set?
I think the one rule we can all agree on is not taking(or trusting) signals that form in the last 4 hours of the US session. I go as far as not taking any candles that form during the US session, which is a rule I have been pushing here. In this case though the candle had formed before the US session open and I would say was fair to trade. Price action candles that form leading up to the US session can still play out in the first half of the US session. In that case it is traders discretion what rules to follow in that case.
The rule here is not taking any intra-day trades that happen in the last 4 hours of the US session, and preferable the last 8 hours. Although if an intra day trade happens during the European session before US opens, I consider it fair game, as there can still be moved off of low TF PA candles during the US session. If a trader wants to be more cautious they can cut off trading as early as they are comfortable with.
2.The gap is when price moves during the time your broker is closed. Most brokers open up a few hours before the Asian session starts, but other institutions will begin trading before that. This light volume trading can move price, so when your broker opens up price has gapped. Since the broker is closed down, non of your stops will trigger until they open up. If price has gapped past your SL, your trade won’t be closed until after the broker opens up trading again. The brokers trading system being down is the same reason you can’t open trades or set entries after the US session has closed on Friday.
