This multiple timeframe trading with daily pin bar strategy is another way you can trade a pin bar when in forms on your chart.
Many forex traders, use multiple timeframe trading techniques to look for buy and sell signals and this system is one way to trade in multiple timeframes.
You may also like to check out this: forex multiple timeframe trading course
Timeframes: only daily chart
Currency Pair: Any
When a pin bar forms in the daily chart especially in major support and resistance levels, it signals a changing market sentiment and can lead to big price moves in the other direction when the low or high of the pin bar is broken.
Now, the idea here is to get into a trade before the high or the low of the pin bar is broken so that your can ride the increase in momentum to maximum profits when the low or the high daily pin bar is broken.
To do that, you have to do multiple timeframe trading by switching to a smaller timeframe and look for buy and sell signals there.
Sell Order Rules
For a sell signal, the following has to occur in order:
- a daily bearish pin bar has to form in a resistance level and has closed.
- when the current day’s candlestick starts, switch to the 1hr timeframe and wait for bullish 1 hr candlesticks to start climbing higher, making higher highs and higher lows.
- the sell signal comes when (a) a 1 hour candlestick breaks the low of the previous candlestick (b) as long as this happens above the low of the previous days candlestick.
- Place your stop loss 1-2 pips above the high of the previous day’s pin bar’s high.
- Take profit: use 1:3 risk to reward or aim for a previous swing low as long as the risk:reward is above 1:2
Buy Order Rules
The buy order rules would be the exact opposite of the sell order rules.
- a daily bullish pin bar has to form in a support level and has closed.
- when the current day’s candlestick starts, switch to the 1hr timeframe and wait for bearish 1 hr candlesticks to start falling lower, making lower highs and lower lows.
- the buy signal comes when a 1 hour candlestick breaks the high of the previous candlestick as long as this happens above the high of the previous days candlestick.
- Place your stop loss 1-2 pips below the low of the previous day’s pin bar’s low.
- Take profit: use 1:3 risk to reward or aim for a previous swing high as long as the risk:reward is above 1:2
Advantages Of The Multiple Timeframe Trading With Daily Pin Bar Strategy
- potential to make 100 plus pips of profit on each trade when trades go well as anticipated.
- tight stop loss as well as less chance of your stop loss being hit prematurely
- Opportunity to pyramid: chances of making more than 1 trade on each setup whilst having a fairly small stop loss distance. Assuming that you have 5 sells signals in a setup and your account allows you to trade 5 standard contracts and if price price moves more than 100 pips and lets say that only one trade has a lowest floating profit of 100 pips, you can do the sums, right? Multiple trades going right =multiplying your profits fast=your trading account increases fast without risking too much.
- Trading on larger timeframe so you have the big picture which reduces a lot of noise found in the smaller timeframe.
Disadvantages Of The Multiple Timeframe Trading With Daily Pin Bar Strategy
- sometimes when the low or the high is broken, there’s no chance of a minor retrace to allow you to buy or sell
- if the pin bar is extremely long, the stop loss distance may also be extremely long so you may need to adjust your contract sizes to keep your risk down.