Have you ever spotted pin bars on the daily charts and seen the big moves the currency pair makes a few candlesticks after that pin bar either up or down?
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Now, back to where I started…
And if you had taken a trade based on that pin bar candlestick, you have have made some huge profits as the market either up or down nicely…
Similar to this?:
But then you are faced with this…
And so you are like…….
But wait there’s a little trick where you can trade the daily pin bar with little risk…
What’s the secret then?
Its to wait for a retrace to the 50% Fib Level and then enter your trade like this…….
And when you make 800 pips plus profit on on single trade then you probably end up like this…
ADVANTAGES OF TRADING THE DAILY PIN BAR ON THE 50% FIB RETRACMENT LEVEL
You’ve seen how daily pin bar are some powerful candlesticks. In fact, if you see a daily pin bar on a support or resistance level, you’ve got to take heed.
You also know that the problem of trading daily pin bars is that your stop loss will be extremely large. Therefore, with this trading technique I’ve shown you, you can reduce this huge stop loss distance.
So here are the advantages of the forex trading strategy:
- You get in a much better price with the use of a sell limit pending order
- You minimize your risk
- which means you can trade larger contracts without risking more
- Reward can be really high as up to 4-6 times what you risked.
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Been trading for years using price action but i still love reading your blogs posts and im still learning new stuff, thanks alot and have a good holiday – Paul
Thanks Paul,
happy holidays too.
Mangi Madang
great insight indeed! i am quite impressed and i am already trying out the 50% Fib retracement, however,i prefer the 61.8 to reduce my risk because of the size of my account ($500).
Thanks for the good work you are doing here
Hi Ambrose,
using the 61.8 fib level does reduce your stop loss distance which can reduce your risk if you are not applying position sizing when you trade.
The other idea is to combine both fib level and the use of reversal candlesticks. for example, price hits 61.8 fib level and then forms a shooting star, then that can be used as a signal.