Trade with Pinbar
Pin bar is small real body with a long tail, the shadow of body can be upper or lower if you want text book explanation than the tail will be at least twice the size of real body. It is single bar pattern easy to spot easy to trade,
sometime body differ from others so does the tail. But all in all the longer tail spin bar works best.
Why we want to use pin bar in this strategy because the long upper or
lower tail show the rejection of price on that level, and that all we want for over system it show the rejection and the momentum in over side right time to enter the trade.
So this is the chart of nzdjpy and you can see this pin bar pattern comes in to play so many time okay and you can easily spot them in any chart.You can see them in 4 hour chart ,daily chart even 15 minute chart.
Pin bar and doji are almost the same the only deference is that, we have open and close in same level and all the character will be same.
In this picture we found
Long Legged Doji,
Doji Star
Gravestone Doji
Dragon Fly Doji
Four Price Doji
But so far in over system we will be looking for two types of doji
1 dragonfly doji.
2 gravestone doji.
Let’s see if we can spot doji in over chart.
As you can see in the chart there are doji almost everywhere, and you can
easily spot them
Any system will fail if it will not tell you where the trend is so it is important
to trade with the trend if you want to be profitable in long run because it
will give you psychological advantage that we trading with the trend so how
we going to use moving average in this system just to see if price is above
moving average it is in uptrend
And if it is below the moving average it is downtrend simple is that so which
moving average we going to use in this system
30 moving average- I have try so may moving average all this year but 30 moving
average really work best for me so far and give consistence positive result all this
year so we are going to use 30 moving average. Most of the charting platforms
have this moving average okay make sure you apply it on closing bases.
Step-1
Now open you charting platform make sure u use candle stick chart, plot 30 moving
average.
Our chart setup will be look like this
Step-2
As you can see in the chart it is in uptrend why, because price is above 30 moving
average and making Higher high and higher low so let’s mark the first high.
Now point A is here over first high so we mark this level At point B price break this level and after that make a pin bar that we are waiting for.
Let’s see how to find trade setup in downtrend.
Here in eur/usd 4 hour chart you can see price is below 30 moving average so we
know that it is in down trend we can also see price is making lower low and lower
high.
At point (A) it make it s first lower low so we mark this low to look for short trade
in future after some time price break that level but did not come to retest that
area so we are waiting in side way now price again make new lower low at point
(B) we mark this area to look for possible short trade in future, after trading in
side way for quite some time it break that area it come to retest it and trading for
some time finally we got a dragon fly doji what we want to see to take a short
trade and u can see the momentum after that doji a huge red candle .
You can see this kind of setup in any time frame and any forex pair you can even
see them in future contract and stock and can trade them all of this trade is highly
profitable you just have to make proper money management rule and cash the
market ,
Let’s see more example of this trade setup
Let’s see some example in commodity crude oil 2 trades one for short and one for long.
Now let’s discus our entry well as you already know that we are looking for pin bar or doji type structure okay which so simple and easy to spot we also know at what level or which time frame we are looking for the trade, once price make a higher high than we mark that level for future to find a trade on that level once price break that level and make a pin bar or doji than we wait for that pin bar to finish we put a buy limit 2 pips above that pin bar for long.
This is the cad/chf 4 hour chart price is above 30 moving average so we are only looking for buy price make s a higher high at point (A) and trade side way for the some time now at point (B) price again come to that level and trade in very tight range this means breakout is about to happen finally price break that level and next candle is a pin bar we are just waiting in side way now when the pin bar complete we put buy limit 2 pip above that and our order get triggered in next bar and price shoot s for +150 pips in over favor .
This is eur/gbp 1h chart price is below 30 moving average so looking for short setup only price make lower low at point (A) so we mark this level price move up and down without momentum at point (B) it retest it and bounce from this level so this is a important level
Finally at (C) price break that level with huge red bar we are waiting for a pin bar as soon we got a pin bar we put sell limit 2 pips below that point .
Now let’s talk about the stop loss because it is a back bone of any trading. It will also save you from losing trade no matter how profitable your system is if you will not use stop loss you will become looser in long run. Only one wrong trade can wipe out your profits so to be safe side always use stop loss when you enter in any trade. How I became profitable is because I make my mind before I enter any trade I know what is my stop loss level and my profit level.
I enter the trade that’s all no looking back either it hit profit or stop loss not moving any of them.
So let’s talk about our stop loss level in our system here in this chart that will show you where we should place stop loss.
This is usd/jpy 4 hour chart we got our swing high at point (A) we mark this level,at point (B) it breaks that level it come back to that level and make a pin bar we put a buy order 2 pips above the pin bar and our stop los will be 2 pips bellow that pin bar also.
Now you may be asking why 2 pip below that pin bar?
And the answer for that is if you look in concept of pin bar, why pin bar forms simply because of the rejection of price on that level that price don’t like to go that level and it quickly bounce from it so where else will be the safest place to put your stop loss .
Second reason is that it gives us minimal risk for great reword.
We all are trader we want to trade to make money but you cannot make money. If you don’t use money management.For any system to be profitable in long run what is the secrete? It is the solid money management rules which can make your system profitable, or I can even
say that strategy ,system can make 10%profitable where 90%depend on your money management skills so it is important to have solid mm rules which you will not violate in future.
My money management rules are like this
1. Risk only 1%of my account. If I have 1000$ than I will risk only 10$ per trade.
2.i have fix my risk reword ration 1:2 so if I risk 10 pips per trade I look for 20 pips
not more than that and not less than that.
Suppose I have 1000$ in my account and this trade come to play let’s see the chart first.
So now here is my set up for trade I know that I have 1000$ account don’t like risk more than 1%and I have 50 pips stop loss than what will I do so I decide to take 0.02 position size in that trade so my loss will be 10 $ which is 1%of my account and my profit target will be 100 PIPs which will be some up to 20$ it is that simple.
If my stop loss will be 10 pips than I will go with 0.10 lot we have to adjust or stop as a 1%okay hope you got my point here.
I have told you one of the most reliable systems which make me a profitable trader so far and give me consistence result all this year this system change my months negative to positive.
This system make me think that I can really make money in forex and it is a stress free system where you take a trade and close your terminal and sleep well and you don’t have to wary about market anymore.
You stop second guessing that market will turn against you why because you are
trading with the trend, you are taking momentum trade and you stop loss is in safe
place.