INTRADAY PIN BAR STRATEGY SIMULATIONS: GPB/USD Trade
Based on actual trading data from Sep 15, 2012. Using the Intraday Pin Bar Strategy on a major currency pair, we enter a long-term trade on an intraday basis. The Hourly Pin Bar signal, position and quality of support and resistance, whole numbers and pivot points are considered before entry. The trade is given an unlimited ultimate profit target over at least two exit levels, and is open for three weeks, so the issues of profit expectancies, trade management, and price action are dealt with as part of managing the trade.
GPB/USD Trade
Subjects Covered:
- Intraday Trading
- Signal Candles
- Position of Support/Resistance
- Quality of Support/Resistance
- Whole Numbers
- Pivot Points
- Multiple Profit Targets
- Trade Management
Enter GBP/USD Long at 1.58571, SL at 1.58238
A strongly bullish large pin bar formed on the hourly chart soon after London opened. The wick of the bar showed a strong and sharp rejection from the 48 hour low and the daily GMT S1 pivot point. We enter an order to go long just above the high of the hourly candle, with the stop loss just below its low. We will take off half of the position at 1.5900, a whole number close to the high of the week, and leave the rest to run.
Target 1 Hit
The target is hit very quickly, within 2 hours of entering the trade. Whatever happens now, we will complete this trade with a profit, as we have taken 42 pips profit and have a risk remaining of only 35 pips. The speed of the rise indicates the rise in GBP/USD is likely to continue further. We continue to monitor the trade.
Final Trade Exit
We had no set target beyond 1.5900 for our next exit or final exit. Instead we patiently monitored the candlestick price action on the daily chart to determine when the uptrend might be reversing. After about 3 weeks, it finally begins to look as if a reversal is happening, after three bullish pin bars fail to produce an upwards move and are followed be a very bearish, near-outside candle. We exit the remainder of the trade for 330 pips of profit, giving a total reward to risk ratio of 5.3.
Conclusion
It is not until several months later that we can see we made the right decision to exit the remainder of the trade when we did. This daily chart shows that the price fell steadily after our exit, and was unable to really get much higher over the following months. Exits can be challenging. In hindsight, we could have made almost twice the profit by not taking off half of the position so quickly.
