UK100GBP Profitable Trade Pattern in the Future
UK Index UK100GBP
1 passion candle
3 Strong Candle
Just sell stop order to #2 low if next bar close higher, move stop order to higher bar low
This pattern very profitable in the future.
Important Things about Pinbars in price Action Trading
A pinbar is a candle pattern that signals a potential reversal.
The candle consists of a longer wick to one side out and a small body.
The rationale behind a pinbar is that the wick signals a rejection of a higher/lower price.
Thus, the price moves into the opposite direction of the candle-wick after the pinbar.
Whereas it seems pretty straight forward to spot a pinbar, there are multiple things to consider about pinbars in price action trading.
There are no certain answers for some questions about pinbar.
These questions are-
Is the rejection-wick long enough to show a significant rejection?
How does the rejection-wick compare to previous price action? If previous candles are wider, a relatively short wick might not indicate a true reversal.
Are the body small enough and the close at a good level?
What if the pinbar has wicks to both sides?
What’s the ideal place for a pinbar?
Do pinbars perform better at support/resistance, round numbers, with or against the trend or does the location of the pinbar have no impact
on the performance?
Beginners will rarely hear anyone talk about these points because they would destroy the illusion of pinbars as a beginner-friendly and easy
to trade strategy.
Without being clear about all possible aspects of a trading strategy, a trader will be left wondering why seemingly similar setups work some
of the time and fail other times.
Whereas it’s the nature of trading not being able to predict the outcome of a trade, there is a huge difference between the statistically
normal failing of a setup and misinterpreting.
So, before traders are actually trying to trust price action trading for their trading, they should know all about this method and gather knowledge.
Otherwise, they might not be able to handle the trading method and end up losing their investment.