How Would You Define a Pin Bar

I'm really trying to focus on trading pure price action and candlestick analysis to advance my trading and one of the setups I really am trying to expand on is the pin bar setups.

Many of you know what these are... heres an example of a few...

My question is do any of you have set rules on what qualifies a pin bar as an actual pin bar?

I would like to code up a rule set in easylanguage so for backtesting I could at least see at a glance potential entries. Obviously this would just be a rough approximation but it would make things much easier.

But to do that I need to understand what really makes a pinbar and pinbar. They are obviously not the same as a hammer candle so for long setups High <> Close and vise versa...

Is there any kind of "the wick should be greater than 50% of the candle" kind of rules or anything like that?

Any concrete rules that I could code would be appreciated. I'd be happy to supply the completed .eld and .pla when finished.

Reply : Well worth a read, recommended. He was partly inspired by James16 over at FF. Some people have quite strict criteria on the 'eyes' others more lax. I think Pring coined the phrase.

From Martin Pring on Price Patterns by Martin J. Pring,

“Pinocchio bars are bars in which the bulk of the trading takes place outside the previous and subsequent trading range.”

“The character Pinocchio tells us when he is lying because his nose gets longer. In the case of the Pinocchio bar, it is the trading beyond the resistance or support level in question that indicates that the signal is false.”

Try This Beneficial Pin Bar Technique

I'll get straight to the point so that you completely understand how I trade this method. First you must know what a pin bar is. If not you should really look at some pictures but I will explain quick. A pin bar has a long tail and a short body. There is 4 different pin bars but I won't touch on that.

The pin bars we are looking for are the kind that form at the top or bottom of a trend. After you spot one of these pin bars you want to see if it closed near any support or resistance lines.

If a pin forms after a trend up then we would look to go short if it closes near resistance. If the pin forms after a down trend and it is near support then look to go long. That's the system, that alone is how I put over 600 pips under my belt this year.

I like it because its so simple and the trades are really easy to spot. It takes me 10 minutes a day to flick through all my charts and adjust any open trades. Only ten minutes a day people, why does anybody sit in front of their computer scalping all day?

The key to doing well with pin bars is only using them near support and resistance. I consider trend lines, chart patterns, pivot points, and key chart levels all support and resistance areas. The best setups are when multiple things line up all at once. Those are the high probability trades, and the ones you can throw some extra dough into.

This pin bar strategy is only profitable if you trade it properly. Don't trade every pin bar you see, Use proper money management, and follow through with trades you take. Sometimes a trade will be in loss for a couple days before it goes in your favor.

I forgot to tell you about stop loss and take profit. Good risk to reward is the key to any profitable strategy. Ask any of the 5% of people that make money trading if they risk more than they make. They would probably laugh in your face.

So for this pin bar strategy your stop loss will be above the high or low of the pin and take profit at two times what you are risking, or a key price level. If your short then aim for a support line, and if your long then aim for a take profit at resistance levels.

If you constantly risk half of what you make on trades then technically you could lose 2 out of 3 trades and still break even. That's not including the spread or other factors. Sometimes you won't be able to aim for twice your risk but others you will be able to shoot for three or four times!

I just took a trade on gold today and I didn't even set a take profit, this trade could make serious money if the trend keeps going up. Barely any risk and a whole lot of reward. Play your trades smart guys. Take profits when you have to, and let profits build when the time is right.

What is the Pin Bar?

Source : http://pinbar.blog.com/2012/05/26/what-is-the-pin-bar/

A Pin Bar is consistently refereed to as a change design and generally seems to be at considerable cost activity stages, these stages can be but are not restricted to :

Significant assistance and resistance
Move peaks and swing lows
Fibonacci levels
Rotate Points
Pattern Lines
Going Averages
Circular Variety Levels

One place that is not so often discussed is dealing the Pin Bar as a extension Pattern. This Pattern seems to be just as consistently as the change Pin Bar Pattern and in my view is just as efficient and provides excellent revenue possibilities.

How to Trade Fake Pin Bars?

Source : http://pinbar.blog.com/2012/05/26/how-to-trade-fake-pin-bars/
 
Pin Bar, which is brief for ‘Pinocchio Bar,’ is 1 candlepower unit installation that signs cost activity investors into prospective reversals out there. A pin bar is an pointed pull that ‘sticks out’ from cost activity. Traders will usually look for one-sided draws that are two periods the dimension the candlesticks system.

When investors see pointed draws huge from cost activity, they can look for the strength that designed the lengthy pull to proceed by looking for a change.

So if a investor recognizes a lengthy pull huge below cost action; they can look to go lengthy. If a investor recognizes a lengthy pull huge above cost activity, they may want to look to go brief.

Much like Pinocchio’s nasal area – the pointed pull of a pin bar can tell us that a lie is being informed.

But not all lengthy draws are high quality. As a straightforward, many of these lengthy draws will not be Pin Cafes at all; but that does not mean that they cannot be used by Price Action investors. This content will move through how to business ‘fake’ Pin Cafes, or lengthy draws that do not keep out from cost activity.

What separates a Pin Bar from a Fake Pin Bar?

Source : http://pinbar.blog.com/2012/05/26/what-separates-a-pin-bar-from-a-fake-pin-bar/

The change between a Pin Bar and a Bogus Pin Bar is established by latest cost activity.

If the lengthy pull stays out from latest costs, that is a Pin Bar. This is the ‘lie’ that the industry may be informing us: That a activity to a formerly untried stage has gotten a new list of customers (or suppliers in the situation of a bearish Pin Bar).

If the lengthy pull does not keep out from past cost action; they are not a authentic Pin Bar, but rather ‘Fake Pin Cafes.’ The image below will show you with further detail:

As you can see above image, the fake pin bar does not quite keep out from past and latest cost activity.

With a authentic pin bar making a lengthy pull above the candlestick, investors could look to start a brief position to take aspect in the strength that designed the lengthy pull in the first position.

However, as you can see from the above installation – that would not have exercised too well.

Trading Bogus Pin Cafes needs extra research, as the indication of a short-term change in costs may not be as constant as that of a authentic pin bar.

Pin Bar Trading Setups for Forex

Source : http://pinbar.blog.com/2012/05/26/pin-bar-trading-setups-for-forex/
 
Pin Bar research is one of the best methods to business the Foreign exchange industry with. By simply assessing a exposed price data we can spot successful arrangements that re-occur out there. The best approach to take with regards to using price activity to business currency trading is just to master a few time-tested and easily recognizable setups; this will allow you to business in a relaxed and gathered manner and will thus help you achieve constant success in currency trading. This article will present a couple of my favorite price activity setups; the change or pin bar installation and the within bar or within day installation.

Reversal Cost Action Setups

Reversal cafes often happen at major move points or at significant support and level of resistance areas in currency trading. Pin Bar change cafes can tip the eager currency investor off to huge online motions and also give investors a tangible technique to quit a past huge online run. Particular illustrations of price activity change arrangements can be found on numerous websites across the internet; YouTube is coordinator to some very good price activity video clips. Letting go bar arrangements are a great way to enter a popular industry or a range-bound industry. Once perfected, specific price activity change bar arrangements can confirm to be your breads and butter currency trading trading technique. You will experience various brands for change bar arrangements in currency trading such as, the pin bar installation or the capturing celebrity installation in candlepower unit terms.

Finding The Pin Bar

The purpose of this section is to give several examples of what a pin bar looks like. Take a look at Figure 5 and the bars that have been numbered (either below or above the bar in question). The chart shows the daily charts for the GBPUSD pair for a period from the 20th January 2006 to the 23rd February 2006. Look at the image and decide whether the numbered bars are good pin bars to trade, based on how they look and where they are. Decide which of these bars, if any, you would trade. See if your comments match those made below.

1. Pin bar has good form. The open and close are nearly equal and they are very close to one side of the bar (in this case, the bottom) and are lower than the previous eye. But the nose is not very long and it doesn’t protrude much from the prices of the previous eye and the bar before it.

2. The open and close are nearly equal and are quite close to one side of the bar (in this case, the high) and are also higher than the previous eye. The nose is not very long and it does not protrude much from the previous eye.

3. The open and close for this bar are nearly the same but they are getting quite close to the middle of the bar – it is almost a neutral bar. It is good that the open and close are above the previous eye. The nose is not very long because of this. (Note that if you played this pin on a break of the pin bar (taking a long position) there would have been no trade as prices went down on the next bar.)

4. The open and close are nearly the same but they are also right in the middle of the bar. It is also an inside bar (or very close to it) where the bar makes a lower high and a higher low than the previous bar – so prices are not protruding.

5. The open and close are near the same price and are right near one end of the bar and are lower than the previous eye. The nose is nice and long, which is good, and protrudes nicely from previous prices. This would have been a good pin to play on the break and we can see that for the next two bars if we had taken a short position there would have been good opportunity to profit from the setup.

6. For this bar the open and close are near one end of the bar and are higher than the eye. Note that the nose doesn’t stick out much beyond the low of the bar that has been numbered 4, so prices have not protruded much. If we look at the next bar we see that prices only go 5 pips above the high of bar number 6, so we would have not entered a long trade anyway.

7. The open and close are not at nearly the same level and the close is nearly half way down the bar and is not higher than the low of the previous eye! The nose does protrude from the prices, but because of the position of the close this is not a pin bar!

8. In contrast, the close of this bar IS within the previous eye, but it is still half way up the bar! The nose also doesn’t protrude much beyond the previous prices. Overall, this would not be a good pin bar to play.

9. Open and close are near one end and are enclosed by the previous eye. The nose is nice and long but fails to protrude from the surrounding prices much, so it would not be a good pin bar.

10. The open and close are near one end of the bar. However, the nose does not stick out. Not a pin bar.

11. This looks promising with open and close near one end of the bar. They are well placed compared to the first eye on the left. The nose sticks out a bit. This bar isn’t at a swing high or swing low or at confluence, though.

Which of these pin bars should a beginner play? The bars numbered 1 and 5 seem to have the best form and have the best long noses that stick out from the surrounding prices. If you are patient over this one month period two pin bars would have been played. They both would have worked well with lots of potential for profit. YES it is easy to say this in hindsight but LOOK for the good pin bar formations while you are trading and try it out. (While trading GBPUSD over this period I personally only took the pin bar labelled 5 and this was the only daily pin bar I traded on the GBPUSD for that period.)

Pin Bar: Introductory Tutorial

This section explains what the Pin Bar is. Following sections explain how it may be traded. Generally examples are only given for pin bars pointing one way. The same concepts can be applied to pin bars pointing the other way (just reverse the concepts!).

Trading is a probabilities game. There is always risk of loss and the trade going ‘the wrong way’ after the pin bar has formed. All we can expect to do is to tip the odds in our favour. When good pin bars are traded then a trader can tip the odds in their favour. Some trades will result in losses; such losses will occur with any trader from time to time. (Even a good pin bar setup may result in a loss!)

Pinocchio bar (which is abbreviated to ‘pin bar’) is poking his long nose outwards andis telling you a lie (an untruth) about where the price is going. The name is based onthe old European story about the wooden boy, Pinocchio, whose nose grew longerevery time he told a lie. The bigger the lie the bigger the nose! For us this means thatwe want a nice long nose when we see a pin bar. We trade in the opposite direction towhere the nose is pointing (so the pin bar in Figure 1 indicates that traders should betaking short positions while trading EURUSD). The high of the bars on either side ofthe pin are the ‘eyes’ for the pin bar. Note that the open and close of the pin must bewithin the left eye.

For a nose pointing up, this means that if the high of the eye isroughly at the 1.2175 level (as shown in Figure 1), then the open and close of the pinbar must be below this level of 1.2175 (as is the case here). If the open/close isoutside of this level then it is not a real pin bar (see the Advanced Tutorial for someideas on how a trader might deal with a bar that looks like a pin bar but fails to meetthis requirement).

The pin bar means that the price is going to move in the opposite direction to wherethe nose is pointing. In Figure 1 the nose is pointing up so the trader should expectprices to move down.

A pin bar must:

• have open/close within the first eye,

• protrude from surrounding prices (‘stick out’ from surrounding prices); it cannot be an inside bar.

A good pin bar has:

• a long nose (and a long nose relative to the open/close/low),

• a nose protruding a long way from the prices around it (it ‘sticks out’),

• the open / close both near one end of the bar.

The pin-bars can be played by themselves as they occur on the charts. Oneforexfactory.com member did some automated back testing and found that merelyplaying a pin bar does not provide spectacular results. You need to carefully select thepin bars you want to play. The best pin bars are played as they bounce off either:

For the BEST results a trader may play a pin-bar on the swing high (or swing low) ora pin-bar that is bouncing off confluence (of MA and Fib levels). The pin bar is a veryreliable setup under these circumstances, indicating that there is a high probabilitythat prices will change direction – which is very tradeable setup!Shown is a cluster of Fibonacci retracement levels from the big moves down during2005. Note that the pin bar is bouncing right off these. This means that the pin bar hasbounced off an area of confluence!Shown in Figure 2 is a close-up of the pin bar that formed on the EURUSD pairweekly chart. Notice that there is confluence of fib retracement levels from the morerecent previous movements down. This pin bar has punched through these, after threeprevious bars were bouncing off this area. This would have been a good pin bar tocatch. The three previous bars failed to move through this area, showing it hassignificant resistance. The pin bar has moved a long way through it before movingright back. The high made by the pin bar is probably the highest price thatwill reached for weeks (or months).

Is this a good pin bar formation? The nose of the pin bar pokes out a long way above previous prices. It has made it through some resistance at the confluence of fib levelsand bounced off the longer-term fib levels (in Figure 2). The open and close are belowthe high of the previous bar (the eye). Yes – this is a good pin bar.