1-to-1 Pinbar Scalping Forex Trading Strategy
There are two aspects of a trade entry that should be considered, first, the trade direction, then the entry itself or the timing of the entry. Both are equally important, but one is trickier than the other.
First, trade direction. Trade direction refers to whether you would be buying or selling. This is determined on whether you think price would go up or down. This is very important. If you get this wrong, then the whole trade would already be wrong, and it would be very hard to salvage that trade. However, this is a bit easier to decipher. In fact, majority of traders get this right. It’s the second thing that usually messes up a trader’s profitability.
So, what about trade entry and timing? Why is it so hard to determine? This is because, when in trade direction, you only have two options, up or down, in timing the entry, you’d have many different options, in fact, each tick that the market makes is an option. Not only is it difficult, it is also critical in order for a trader to have a positive reward-risk ratio. Those who haven’t got the skill of timing an entry down often resort to hedging strategies that are a bit risky and doesn’t allow a trader to predetermine the risk.
Indicator Based Entry Timing Versus Candlestick Pattern Based Timing
There are many different ways to time an entry. It could be based on whether price reached a certain area or breaks out of one. It could be based on patterns or it could be based on a specific set of rules. But I think there are a couple of ways to time a trade that could be very specific, it seems surgical.
One way would be based on a confluence of reversal conditions coming from indicators. It could be a crossover of an oscillator, an overextended market scenario, Heiken-Ashi reversal, etc. This is a great way to surgically time an entry because it takes subjectivity of decision away from the trader. Every decision is based from an indicator, which is mathematically derived from price movement itself. This allows us to statistically test whether our entry works or not. The setback though is that it often is a bit more lagging compared to observing price movement itself.
Another way to time entries would be through the use of candlestick patterns. There are candlestick patterns that have been proven to have a positive expectancy of yielding a profitable trade. One of the most popular is the pinbar pattern.
A pinbar is basically a reversal candlestick pattern with a small body and a long wick. The long wicks signify price rejection. Whichever way the wick is pointing, the market is rejecting that price. Whichever way the small body is on, the market might be going towards that direction.
Below is an example of a bearish pinbar with a long wick on top.
Next, we have an example of a bullish pinbar with the wicks below.
Trade Strategy Concept
Knowing that pinbars are commonly recurring, higher probability reversal patterns, we will be trading based on this strategy and allow the probabilities of this pattern to work on our favor.
But we can’t take just every pinbar pattern that presents itself. We will have to filter it based on the general direction of the longer-term trend. So, we will be trading pinbars that agree with the direction of the market based on the 200-period Exponential Moving Average (EMA). What this does is that it allows us to take trades just as the market is about to end a short-term retracement on a long-term trend.
Also, since we are relying solely on the pinbar and the long-term trend, it might be good to have conservative targets for a scalp. We will have a 1:1 reward-risk ratio based on our stop loss and take profit targets.
Timeframe: 1-minute, 5-minute, and 15-minute chart
Currency Pair: any major currency pair
Session: Tokyo, London and New York session
Buy Trade Setup
- Price should be above the 200 EMA (gold) indicating a long-term bullish market
- Enter a buy market order on the close of a bullish pinbar
- Set the stop loss at the low of the candle
- Set the target take profit at 1x the risk on the stop loss
Sell Trade Setup
- Price should be below the 200 EMA (gold) indicating a long-term bearish market
- Enter a sell market order on the close of a bearish pinbar
- Set the stop loss at the high of the candle
- Set the target take profit at 1x the risk on the stop loss
This is not a high reward-risk strategy as we are limiting it to 1:1. This strategy is also not a high probability strategy because its entry is based on a confluence of only two conditions. Where this strategy shines however is in the volume of transactions that you could have and that is very important for scalpers who take minimal profit per trade. This allows for the statistics to work on our favor. It would be very tedious and brutal at times, but the law of large numbers could be on your side.
Forex Trading Systems Installation Instructions
1-to-1 Pinbar Scalping Forex Trading Strategy is a combination of Metatrader 4 (MT4) indicator(s) and template.
The essence of this forex system is to transform the accumulated history data and trading signals.
1-to-1 Pinbar Scalping Forex Trading Strategy provides an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.
Based on this information, traders can assume further price movement and adjust this system accordingly.
Forex Metatrader 4 Trading Platform
- Free $30 To Start Trading Instantly
- No Deposit Required
- Automatically Credited To Your Account
- No Hidden Terms
How to install 1-to-1 Pinbar Scalping Forex Trading Strategy?
- Download 1-to-1 Pinbar Scalping Forex Trading Strategy.zip
- Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
- Copy tpl file (Template) to your Metatrader Directory / templates /
- Start or restart your Metatrader Client
- Select Chart and Timeframe where you want to test your forex system
- Right click on your trading chart and hover on “Template”
- Move right to select 1-to-1 Pinbar Scalping Forex Trading Strategy
- You will see 1-to-1 Pinbar Scalping Forex Trading Strategy is available on your Chart