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Yes, Give it to me

2 Problems With the Pin Bar Trading Strategy 

 July 30, 2014

By  Rayner

The Pin Bar Trading Strategy is a popular method for trading however not many traders discuss the drawbacks that comes along with it.

In this article I’m going to present you the 2 problems I encountered when I traded the Pin Bar Trading Strategy.

1) Pin Bar Trading – Frequency

If you’re going to be discipline and strictly trade  Pin Bars off Support Resistance, then chances are you’d miss opportunities like this. No candlestick patterns here but high probability trades nonetheless.

pin bar trading missing out moves

2) Pin Bar Trading – Stoploss

It’s common knowledge that traders place their Stoploss just below the low of the Pin Bar. (If they are long)

But do understand that by doing so you could be cutting into an area you should be looking to long. Armed with that knowledge, savvy traders are able to take advantage of the ones who placed their Stoploss at obvious levels.

pin bar trading strategy bad cutloss

Despite having these drawbacks, the Pin Bar Trading Strategy provides good risk to reward when used appropriately.

Do take into account these problems should you identify the next Pin Bar on your charts.

Trade Safe!

  • 🙂 great post Rayner.
    I was wery well amused. Because i had de similar discusion allready with a trading friend witch trade sucsessfully pinbars. But it ist great to see your post because i know right now that i am not allone with my arguments.

  • At the picture you show, there are 3 or 4 bearish engulfing bar. And in price action theory, not only pin bars but also engulfing bars, 2 bars reversal, inside bars etc makes sense.. Thank you for your nice post.

    • I’m highlighting the issues one would face if trading solely the pinbar setup. It’s a viable approach but it does has it’s drawbacks.

      You could trade when price breaks the high of the pinbar or when price retraces, there’s no right or wrong. So i can’t agree that a pinbar isn’t valid just because a high is not taken out.

      Cheers!

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