Pinbars provide fx traders with low risk entry signals if applied correctly.
We will be placing stop-losses just above or below the pinbar to keep the risk as low as possible.
This forex system combines pinbars and the Mega Trend indicator.
Indicators: Mega trend, PinBar
Preferred time frame(s): H1, H4, Daily, Weekly, Monthly
Trading sessions: N/A
Preferred Currency pairs: Majors + Currency Crosses
Example: EUR/USD Hourly Chart
We have two valid entry signals in the EUR/USD down trend. Red pinbar + red Mega Trend indicator line = sell signal. Click the chart to enlarge.
- Mega Trend indicator line blue (bullish trend)
- Green Pinbar appears on the chart
Open buy at the open of the next candlestick. Place stop 1 pip below the low of the bullish (green) pinbar.
Price objective: Risk to reward 1:3 (i.e. risking 25 pips to make 75). Alternatively, exit the trade at previous resistance.
- Mega Trend indicator line has to be red colored (bearish trend)
- Red Pinbar appears on the chart
Open sell at the open of the next candlestick. Place stop loss 1 pip above the high of the bearish (red) pinbar.
Price objective: Risk to reward 1:3 (i.e. risking 40 pips to make 120). Alternatively, exit the trade at previous support.