The Pinbar Strategy with Price Action

Trading Systems Free Forex Trading Systems
1

Hi Babypips!

Let me show you one of the strategy I use to trade. It’s a well known strategy, but I don’t see a lot of people actually using it. I’m talking about the pinbar strategy.

What is a pinbar?
A pinbar is the name we gave to a bar that:

  • has the open and close really close to eachother
  • has a really long leg
  • has a short leg
    (you can see some pinbar examples at the bottom of this post)

When to trade a pinbar?
The basic idea is to trade pinbar as a trend reversal signal. So when you see a pinbar pointing up, you go short.
However, you should not trade all pinbars, or you will lose money. The two most important rules to chose a pinbar are:

  • Only take the nice looking pinbars (as described above)
  • Only take pinbars that are in a trend, not sideways

Some examples
In the attachement below I highlighted 3 nice pinbars.

I like this technique because it’s quite simple to follow, and it works.

I’ll try to post more example of trades that I took, explain how I choose the best pinbars, and how I deal with the trade management.

Let me know if you are interested to hear more about this, and if you have any questions!

PS: you should follow me on Twitter where I post Forex chart daily about price action: @21pips, https://twitter.com/21pips


2

A few important things that I forgot to mention:

  • The pin bar strategy can work on any timeframe and pair
  • The color of the pinbar does not matter
  • You have to wait for the pinbar to close before taking a trade

Good trading!

3

Her thomas, If your serious about PA and pinbars see “Forex Price Action” thread. You won’t be disappointed.

Also if you want to spot PB’s use candlestick graphs, it’ll make things easier.

Darth

4

Hi darthfrancis,
Yes I’ve looked at this thread, looks interesting. But I like to keep things simple. Here I’m only going to talk about pinbars. Focus is good! :slight_smile:
And about bar charts versus candlesticks, it’s exactly the same. And I’d even argue that is easier to spot pinbars with bar charts.

Anyhow, there was a nice pin bar a few hours ago on USDCHF:


5

No problem, well good luck to you always good to have another PA trader about.

Darth

6

Very new in this and obviously very interested to learn as much as possible. I use demo with candles but will try this one during the week. Thank you for sharing your knowledge.

7

Hi Thomaas. Im very interested in the simple focused approach. I have been trading over 5 years and also believe in keeping it simple.
What I would like to know is, do you have a mechanical way to decide the trend you say you follow? How long have you been trading this strategy? What is your average risk/reward, profit/loss ratio?
The reason I ask is I back test all my strategies over many years using forex tester 2 to see how robust & consistent it is. This enables me the confidence to trade live & stick to the rules through hard times. Im very interested in back testing this & working with you to get conclusive results.
So far I’ve drawn a blank statistically with trend following strategies on the long run, but I do believe I need a 100 % mechanical price action trend strategy to diversify the Slingshot strategy I use.
Looking forward to your response

8

When do you exit your trade?