The simple pin bar forex trading strategy is a forex price action trading system that uses the pin bar for trade entries.
Chart pin bars show a drastic change in market sentiment. If you see a bearish chart pin bar form at a resistance level in an uptrend, it can be a good entry signal that the downtrend may be forming.
Similarly, but on the exact opposite, if you see a chart bullish pin bar form in a downtrend at a support level, there’s a possibility that an uptrend may be forming.
Currency Pairs To Trade?
You can use the MT4 pin bar forex trading strategy to trade currency pairs.
Other Timeframes To Trade?
You can trade with any MT4 timeframe, but I suggest you trade with 1 hr timeframe and up; to those larger timeframes. They tend to be more accurate and reliable, and there is much less noise.
Any Other Forex Indicators Required?
You don’t need any forex indicator.
Here’s What A Pin Bar Looks Like
If you are still new to forex trading, you wouldn’t know what a pin bar looks like, so here is a chart of bearish and bullish pin bars.
Here are a few things to note:
- A chart pin bar pattern is a one candlestick pattern
- a very distinct feature of pin bars is their very long tails and tiny body.
- The nose of pin bars should be very little to no nose at all.
How To Trade The Simple Pin Bar Forex Trading Strategy
Trading chart pin bars should come easy to you if you can identify levels like:
- support and resistance levels.
- Fibonacci retracement levels.
- Where price comes and hits chart trendlines or channel trendlines.
Here’s how to trade Bearish Pin Bars:
- in an uptrend, if the price hits a resistance level or a downward chart trendline, wait to see if you see a chart bearish pin bar.
- Place a sell stop order two pips below the low of that bearish pin bar.
- Then place your stop loss(SL) 5-10 pips above the high of the bearish pin bar.
- Use previous swing lows to take profit target levels.
Here’s How To Trade Bullish Pin Bars:
- If the price hits a support level or a rising trendline in a downtrend, wait to see if you see a chart bullish pin bar.
- Put a buy stop pending order two pips above the high of the bullish pin bar.
- Place your stop loss(SL) 5-10 pips below the low of that bullish pin bar.
- Use previous chart swing highs as your take profit target level.
Advantages Of Trading Pin Bars
- Pin bars are easily identifiable reversal chart candlestick patterns.
- They form in all MT4 timeframes presenting opportunities for the forex scalper and the swing trader.
- Good risk: reward ratios(R: R) for trades that work out as anticipated.
Disadvantages of Trading Pin Bars
- Not all forex pin bars are created equal, so avoid trading chart pin bars that form anywhere on the mt4 chart at levels that make no sense or are not supported, resistance levels, etc.
- I agree with many other traders that trading pin bars in a smaller timeframe will result in what’s called a “noise” in forex.