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daedalus

How Would You Define a "Pin Bar"?

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I'm really trying to focus on trading pure price action and candlestick analysis to advance my trading and one of the setups I really am trying to expand on is the "pin bar" setups.

 

Many of you know what these are... heres an example of a few...

 

pin-bars-from-trendlines-audjpy1.gif

 

My question is do any of you have set rules on what qualifies a pin bar as an actual pin bar?

 

I would like to code up a rule set in easylanguage so for backtesting I could at least see at a glance potential entries. Obviously this would just be a rough approximation but it would make things much easier.

 

But to do that I need to understand what really makes a pinbar and pinbar. They are obviously not the same as a hammer candle so for long setups High <> Close and vise versa...

 

Is there any kind of "the wick should be greater than 50% of the candle" kind of rules or anything like that?

 

Any concrete rules that I could code would be appreciated. I'd be happy to supply the completed .eld and .pla when finished.

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Here in the CC, your 'pin' bars can be referred to as a few titles:

 

1) Hammer (one of my personal faves)

2) Doji

 

From there, you can get offshoots such as inverted hammer, gravestone, doji, etc. I could care less that we call them but wanted to get them out of the way.

 

In your example, you are basically looking to buy hammers. Easy enough in theory.

 

From there it's a matter of defining what type of trend we are in. If my analysis says we are in an uptrend, I would look to buy as many hammers as I could, as you've done here. That's contrary to the standard candlestick work out there that says hammers are reversal points. Here we are using pin bars / hammers to buy in an uptrend, which is a good idea IMO.

 

So the real question at hand is - when do we buy the pin/hammer? How is the trend going to be identified? Once you have decided that it's time to get long, then it's a matter of looking for our pin/hammer friends. We can call them PAMMERS or HINS.

 

;)

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I'm really trying to focus on trading pure price action and candlestick analysis to advance my trading and one of the setups I really am trying to expand on is the "pin bar" setups.

 

My question is do any of you have set rules on what qualifies a pin bar as an actual pin bar?

 

Have you read trader dante's stuff?

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If you had entered all those bars you identified above using a BUY STOP 1 Tick above the high you would have avoided the stop out. Your entry method can also be helpful when trading these bars.

 

The other thing I would add is stick to trading these bars on higher timeframes as they are more evident to all traders. 5, 9 or 15 Minute charts as an example.

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Have you read trader dante's stuff?

 

Well worth a read, recommended. He was partly inspired by James16 over at FF. Some people have quite strict criteria on the 'eyes' others more lax. I think Pring coined the phrase.

 

From Martin Pring on Price Patterns by Martin J. Pring,

 

“Pinocchio bars are bars in which the bulk of the trading takes place outside the previous and subsequent trading range.”

 

“The character Pinocchio tells us when he is lying because his nose gets longer. In the case of the Pinocchio bar, it is the trading beyond the resistance or support level in question that indicates that the signal is false.”

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Yea I am looking at using these in conjunction with prior s/r and db/dt's, and possibly clean swings with fib retraces.

 

Entry on the break of the high/low of the bar in the opposite direction of the wick (obviously).

 

Thanks for all the comments and help gents. I've got some massive reading to do with the dante thread.

 

I had read most of the James16 thread about a year ago before it ballooned to 2200 pages. Good stuff in there.

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Yea I am looking at using these in conjunction with prior s/r and db/dt's, and possibly clean swings with fib retraces.

 

Entry on the break of the high/low of the bar in the opposite direction of the wick (obviously).

 

Thanks for all the comments and help gents. I've got some massive reading to do with the dante thread.

 

I had read most of the James16 thread about a year ago before it ballooned to 2200 pages. Good stuff in there.

 

I don't know that you need to do massive reading. Most of it is examples.

 

The dynamic here is rejection. The trick is to figure out how important is whatever it is that's being rejected. Therefore, you have to carefully define -- as you know -- whatever it is you're testing for rejection. DTs, DBs, and Fibs should be fairly easy, or at least fairly straightforward. Swing points and trendlines might be another matter entirely.

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^^ Exactly. Which is why i'm gonna avoid the swing points and trendlines. That stuff is much more subjective IMO and i'd rather just wait for solid areas on a chart to look for reactions with as little interpretation as possible.

 

Thanks again for your help gents.

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when you look at a pin bar-wick-doji or other name -the first thing you should realize is who made it--a pin bar located at the start of a trend is usally a bigger timeframe player coming into the mkt-by bigger timeframe player i am refering to big money traders who will probably hold overnite and will also protect their position by adding on if challenged---if a oin bar happens near the end of a trend it is usually caused by late small traders who think the trend is going to continue and the opposite side of their trade is the big guys covering--just a observation from 30 years of trading-gl on coding-i honestly will tell you that this is a thinking mans game -not a mathematicians game

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