Forex Trading Price Action: Pin bar
A lot of traders have this question in mind:
When we see a pin bar. But it does not trigger immediately on the next bar –
What should we do?
In my experience, when a price action pin bar occurs: If the pin does not break by the next 4 bars.
Price may not be heading the direction of the pin.
On the above chart example: Usd Chf 4hr
Price did not break the pin on the 2nd following bar. This will get you thinking if the pin is still going to trigger.
As this is only the 2nd bar after the pin, i did not close my pending sell stop order below the pin.
True enough the 3rd bar broke the pin and took the trade nicely down.
Next Intermediate Article: How to use moving average
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Please elaborate what do you mean by these two statements of your in the above case :-
a) “If the pin does not break by the next 4 bars.”
b) “True enough the 3rd bar broke the pin and took the trade nicely down.”
Thank you
Hi Alvin,
Do you see the blue box which is drawn in the chart. It highlights the pin bar.
At the base of the blue box, which is also the base of the pin bar.
The break of the pin bar means that the next few following bars will exceed the base of the blue box (pin bar). Meaning it will go lower than the base of the pin.
This is called the break of the pin.
and you can see in the chart, the 3rd bar after the pin bar broke the base of the pin. This is the break of the pin.
hope this clarifies.
Thank you Ezekiel for the clarification.
In other words when the price action breaks through the pin bar low. But just for curiosity sake, do you wait for the 3rd pin bar to close before you fire short or do you just fire short the moment the 3rd bar breaks the low of the pin bar?
There are several ways to enter on the pin bar.
One method is to place a pending sell order below the pin bar. therefore when the next bar or the following bars break the pin, the sell order will be triggered and we are in the trade.
Trading the pin bar is one of our strategy, however to be consistent in forex trading you will need to have a proper trading system. We teach that in our group.
I hope to see you in it. =)