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Just remember, a Pin Bar is “NOT” a hanging man or doji candle. It’s a unique candle (single bar formation) with an obvious spike, or tail, much larger than the entire body. It’s only a valid pin bar if it forms in the correct place, otherwise, its nothing to take notice of. In an uptrend, it can’t form at the highs and in a down trend, it can’t form at the lows.
Remember, dont just play every pin bar, not all pin bars are created equal. The ones that have higher values are at swing lows or swing highs, and are formed on either heavy Support and Resistance .Th eoin bar forms due to false breaks of these key levels.
They also form at retracement levels or major EMAS (moving averages). Also remember, the higher the time frame the higher the probality. I find the dailys tend to have around a 75 + % success rate, with the hourly around the 60% (lower time frames have 50/50). However, 50 50 strike rate is more than enough to result in solid profits, because your risk reward is huge.
To play a pin bar(if it formed on a upswing) place the sell stop underneath the nose, or use the 50% retracement of the candles range to enter. The important thing to note is that whichever direction the pointy part of the candlestick is, we expect the market to move the other way.
The pin bar reversal wil work in trending markets or from extremes of ranges (s an r).
Hope that expands a little on the topic of Pin Bars in trading forex.
For more on Pin Bar Strategies, Visit other sections of the website, there is a detailed explanation here > Pin Bar Article
Great job Nial
Dear Sir,
I was thinking of concentrating on 3 or 4 often occuring signals like inside days , It was an eye opener that pinbars are not hanging man. Please accept my heart felt thanks for putting up this wonderful site, I will sure go through all the pages and videos.
Thanks and Regards
Prashant Chakravarty
New Delhi India
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danc said,
December 1, 2008 @ 3:05 pmWell said.. Nial.. thankyou