Pin Bar Trading System
: H4 and above
This trading system is very easy to use and just need a few minutes minutes per day to scan the charts and try to identify if we have a trade signal or not. The system need a BAR CHART to work with and it looks for a specific bar which is called the PIN BAR. Here is how a pin bar looks like.
This strategy works on H4,D1 and higher timeframes.
The strategy consists of indentifying these pin bars and then place pending orders accordingly.
A Pin Bar is a bar which has a long tail and the close/open are around the same level or a little apart.
Once you identify a PIN BAR, you choose the FIBO tool from your trading platform and you place a the fibonacci levels on the PIN BAR. After doing so, you place a PENDING ORDER at 50% retracement level of the PIN BAR as follows:
As you can see above, we have an UP PIN BAR, so we place a PENDING SELL ORDER at 50% retracement of the PIN BAR after it has closed! We place the Stop Loss just a few pips above the high of the PIN BAR.
As for the Take Profit, you can use a fixed takeprofit level or you can use a trailing stop to trail your profits.
This system is has a high Risk/Reward ratio. You risk very little per trade and the reward can be 10x the risk.
The examples above are for a sell situation, for a buy situation, you just reverse the rules. It is very easy for anyone to do that I guess.
Some points worth noting and should be observed as close as possible!
1. Wait for the Bar to close before you decide to do anything with it.
2. Make sure the pin bar has appeared at a support or resistance level, a fibonacci retracement level or bounced off a trendline.
3. Bring your trade at beakeven as soon as you can.
4. Risk less than 5% per trade.
As with any system, you should practice it for quite some time on a demo account so that you can get the mastery of it. You will be doing errors etc at the first time so it is better you do them on a demo account. After a few weeks of practice, if you find this system to be suitable for your own trading, then you can move on to your live trading it. This system really works and it is really for free. Be patient and practice to become perfect.
I hope that this system will be of the benefit of everyone. Hope to hear back... All the best.