Pin Bar Price Action Forex Trading Strategy

The pinbar price action forex trading strategy is a trading system that is based on the single candlestick patterns of the Pin Bar, offering unique clues into naked trading.

This strategy however, combines the pin bar, detrended price oscillator and custom moving averages into one simple trading strategy.

Chart Setup

MetaTrader4 Indicators: Detrended Price Oscillator.ex4 (default setting), Custom Moving Averages.ex4, PinBar.ex4 (default setting)

Preferred Time Frame(s): Any

Recommended Trading Sessions: Any

Currency Pairs: Any

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Download the Pin Bar Price Action Forex Trading Strategy

Buy Trade Example (Click the picture for full size)

pinbar-price-action-forex-trading-strategy

Fig. 1.0

Strategy

Long Entry Rules

Enter a buy position if the following conditions or rules are met:

  1. Watch out for a bullish Pin Bar formation around support level, if such formation is sighted, it therefore supports a bullish signal. In this case, we had a doji with a smaller upper wick and a longer shadow (refer to Fig. 1.0).
  2. If the blue line of the Detrended Price Oscillator custom indicator breaks above the 0.0000 level, it denotes a bullish trend.
  3. As seen on the chart on Fig. 1.0, a bullish candle opens and closes above the Custom Moving Averages line, a sign that price is being pressured to the upside i.e. a bulls market.

Stop Loss for Buy Entry: Place stop loss ~ 10 – 15 pips below entry price.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit on positions if the following chart or indicator patterns are in display:

  1. If a reversal candlestick pattern develops, for instance a doji (usually defines indecision in the market, if the length of the upper and lower shadow of the doji are approximately equal). Check out for such price actions.
  2. If the blue line of the Detrended Price Oscillator custom indicator breaks below the 0.0000 level, an exit or take profit is looming.
  3. If a bearish candle opens and closes below the red line of the Custom Moving Averages indicator, it is a trigger to exit or take profit.

Sell Entry Rules

Enter a sell order if the following conditions or rules are true:

  1. If a bearish pin bar (inverted hammer as seen on Fig. 1.1) forms around a support or resistance level (in line with the Fibonacci Retracement levels), a sell signal is most appropriate.
  2. If the blue line of the Detrended Price Oscillator custom indicator breaks below the 0.0000 level, a sell signal is in order.
  3. If a bearish candle opens and closes below the red line of the Custom Moving Averages indicator, it is a signal to sell.

Stop Loss for Sell Entry: Place stop loss ~ 10 – 15 pips above entry price.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit on position(s) if the following chart or indicator patterns are in display:

  1. If a reversal candlestick pattern forms following a bears session i.e. a hammer candlestick pattern, an exit or take profit is advised.
  2. If the blue line of the Detrended Price Oscillator custom indicator pushes above the 0.0000 level, an exit or take profit is in order.
  3. If price opens and closes above the red line of the Custom Moving Averages indicator, it is a call to exit or take profit.

pinbar-price-action-forex-trading-system

Fig. 1.1

Free Download

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About The Trading Indicators

Pin bars offer traders clues on price actions and as such they are individual candlestick pattern that are usually recognized by their small bodies and long wick.

The Detrended Price Oscillator has the sole function of removing trend from price and making it easier to pinpoint cycles (highs/lows), as well as estimate the length of such cycles.

The Custom Moving Averages is a simple moving average that plots the mean of prices over the most recent 13 periods.

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