Forex trading is very rewarding if you have the patience to learn to do it properly. The pin bar is a very reliable trading strategy that any beginner can learn to work with. Learning it on your own may not give you the desired results and you could end up dismissing it.
One of the ways to approach pin bar trading is to wait for the best price to take signals to form. It is not advisable, as tempting as it is, to get onto every pin bar that pops up. You must learn how to separate lower probability trade set ups from higher probability ones. Getting your own Forex demo account could help speed the learning process.
Here are a few tricks you can use to figure out how you can increase your pin bar trading results:
1. Attend to the Trending Pin Bars First
Sometimes you will have other pin bars such as those in counter-trend pin bars, trading but those are infrequent. To be on the safe side, follow the ones in the trending markets. This calls for to focus on the currency pairs and give little or no attention to those not trending. This is imperative if you are keen on learning how to trade pin bars.
When you learn how to trade trending markets on the daily chart time frame and then advance to the4-hour chart time frame, then you are well on your way to becoming a pin bar trader of note. The 4-hour chart involves taking pin bars that are within the daily chart trend direction.
2. Look at the Pin Bars at Key Chart Levels
It is important to pay attention to pay attention to other markets that are trading even as you focus on the trending markets. Once you have had your fill of the trending markets, you can move on to trading in pin bars in other markets.
Furthermore, you will quickly find out that markets do not always trend. You still need to trade whether there are trending markets or not. Therefore, do not ignore other markets. Once you have mastered pin bars in the markets that are trending, you can move your focus to pin bars that form at key levels. These ones add a strong factor of confluence and you can examine key chart levels that present pin bars in trends.
You might also want to learn about key chart levels of resistance or support which have a price that goes back and forth between key resistance and support levels.
3. Search for the Place Where the Pin Bar’s Tail Protrudes
A protruding tail refers to the tail of the pin bar sticking out at some point along the price action trail or somewhere through the key chart level. This forms a false break strategy. The more the protrusion, the stronger the rejection and price reversal at that particular point is. With a strong reversal, there is a high probability of that pin bar working out.
Inasmuch as protrusion is up to your discretion and varies from person to person, there are pin bars whose protrusion is so obvious that it would be impossible not to notice. Any trader seeing such a pin bar would notice the protrusion immediately and act on it without further ado. If you find one of these, you should latch onto them immediately. In fact, you should be on the lookout for them.
Trading pin bars may look straightforward especially since you have an inkling of what you need to look for. However, as effective as they are as a trading signal, trading them is not a walk in the park. There are discrepancies between pin bars that you could easily miss and therefore end up trading the ones you should avoid.
The best thing is to not only trade often, but also to learn as much as you can about them. Gaining experience by trading often is as important as getting all the information you need.