Hey guys, i've been lurking around and reading around the forums for quite some time now. I am not trading any real money yet, so the plan is to sim trade until my analysis improves and consistency in picking winning trades.
I have chosen to focus on just one setup, the pin bar. I am sure this needs no introduction, as it's a very widely used pattern.
I have also chosen to focus on the stock market. Having spent some time with forex, I find that , even taking into account all the majors and crosses, you maybe have 40-50 pairs to scan for setups. Compare that to 3000+ on the US stock markets and, in my opinion, that gives me the benefit of choice.
Every Sunday I plot key levels on charts and wait for pin bars to form. Trades have the following assessment criteria:
Bar size: The pin bar must be big enough to signal a genuine and strong enough reversal, but also not so big that the majority of the reversal is contained within the bar.
Confluence: Pin bars must form off key levels, preferably where multiple strong support and resistance levels merge together.
Space: Pin bars must not be too close to areas of congestion or 'traffic'.
The overall structure of the market: In other words, does the trade actually make sense? Am I taking a pin bar off support in no man's land? or am I trading within a well defined trend or pattern.
That's it so far. I will detail my trade management once I find a setup worth taking. One last thing to point out is that since stocks gap quite a lot, I have chosen the weekly charts to smoothen out the price action and so gaps have less of an effect.
I will keep a running total of my % win/loss, as I will 'risk' 1-2% per trade, based on how good I think the setup is.
:clover:
I have chosen to focus on just one setup, the pin bar. I am sure this needs no introduction, as it's a very widely used pattern.
I have also chosen to focus on the stock market. Having spent some time with forex, I find that , even taking into account all the majors and crosses, you maybe have 40-50 pairs to scan for setups. Compare that to 3000+ on the US stock markets and, in my opinion, that gives me the benefit of choice.
Every Sunday I plot key levels on charts and wait for pin bars to form. Trades have the following assessment criteria:
Bar size: The pin bar must be big enough to signal a genuine and strong enough reversal, but also not so big that the majority of the reversal is contained within the bar.
Confluence: Pin bars must form off key levels, preferably where multiple strong support and resistance levels merge together.
Space: Pin bars must not be too close to areas of congestion or 'traffic'.
The overall structure of the market: In other words, does the trade actually make sense? Am I taking a pin bar off support in no man's land? or am I trading within a well defined trend or pattern.
That's it so far. I will detail my trade management once I find a setup worth taking. One last thing to point out is that since stocks gap quite a lot, I have chosen the weekly charts to smoothen out the price action and so gaps have less of an effect.
I will keep a running total of my % win/loss, as I will 'risk' 1-2% per trade, based on how good I think the setup is.
:clover:
Pin Bars on the Weekly charts of Equities
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