pipshower,
i. one should enter immediately after the break of the pin or small margin / filter is to be used ?
ii. how do you calculate / arrive at the target price of 126.
shekhar
pip shower,
please see the attached chart for EURJYP H4 time frame we are seeing a pin. is it a pin ? does it needs some special characterstics to be called so, such as closing to be closer to the opening as we have in inverted hammer kind of thing. can we short on the break of pin ?
shekhar
Hello Shekhar,
Let me point out the answers to your questions one by one.
What is a PIN BAR?
A pinbar is formed as a result of fight between the buyers and sellers wherein initially price is pushed by one of the bears or buyers high above the previous bar in case of swing high with buyers and in case of sellers at swing low lower than the previous bar . Then the opposite party comes to play pushing the price lower or higher [for swing high and swing low respectively] causing the bar to close lower than it opened in case of swing high and higher than it opened in case of swing low causing the bar close in the previous bar.
This cause the nose of a pinbar to be longer . The longer the nose better it is. The difference between the openeing and closing eye of the bar is quite small .
This forms a pin bar .
Is it always tradable?
No. Pinbar is tradable when it occurs at swing high or swing low with enough open space around.
A pin bar is called tradable only when the price breaks through the pinbar low or high respectively at swing high and swing low validating the pin bar tradable entry .
Higher the timeframe the better and longer the nose better it is.
How do i validate a pin bar?
I usualy check for the pin bar formation at the price pivot zones and then trade the break of it .
How to put a stop loss and take profit levels?
This is personal way to do it.
I usually place my SL above the price pivot zone where the pin bar occurs .
TP is placed at the next price pivot.
This was reason why i placed TP in 126 region for EUR/JPY .
When i mean 126 its a zone so if i am not gonna be available in front of screen i will put a TP at 126.70 region to avoid any whipsaws that we may see at 126 zone. and avoiding price missing my target .
Here i am attaching the chart for you to understand.