Pin bar trading strategy is extremely popular among the novice trader. Due to its simplicity, the pro-UK traders often consider it one of the most effective way to trade the market. Most of the time the pin bar signifies a powerful reversal signal. Those who are completely new to the trading profession might not know what a pin bar is. A pin bar is nothing but a single candlestick which has a long tail and a very small body. Though we have bullish and bearish pin bar, today we are going to learn four amazing technique which will help us to execute quality trades using the bullish pin bar.
Find a trending market
There is saying, the trend is your friend. To limit your risk exposure, you must learn to trade the market in favor of the market trend. Since we will be trading the bullish pin bar, it’s highly imperative to find a trending currency pair where the bulls are in control. Once you have spotted the pair, wait for a minor retracement in the price so that the price drops towards the critical support level. Once the price hits a major support level, look for bullish pin bar pattern to execute long trade.
Selection of the time frame
Time frame selection plays a great role when it comes to the trading business. You can’t make consistent profit by trading the market in the lower time frame. As a price action trader, you must use the best Forex trading account in the UK so that you can use the professional trading platform SaxoTraderPro. Instead of analyzing the data in the lower time frame, use the daily and weekly time frame. Being a long time frame trader, you will have to wait for a long period but it’s normal. Always remember, the conservative trading technique is the best way to improve your win rate in the trading business.
Avoid trading the major news
Trading the bullish pin bar is extremely profitable. But if you trade during the high impact major news release, chances are very high you will lose a big portion of the investment. Most of the time the market exhibit false spike before major news release and hunt the tight stop loss. So, it’s better to trade during the major news release since it will dramatically reduce the risk factors in trading. However, if you intend to trade the bullish pin bar before the major news release, make sure you use multiple time frame technique to assess the quality of the trade setups.
Dealing with the losing trades
Trading the bullish pin bar is a great way to make a profit from this market. But do you think you will all the trades? The simple answer is NO. Even the pro traders have to lose money regularly while using the pin bar trading strategy. So, never risk more than 2% of your account balance at the initial stage since you never know which trade will hit the potential take profit level. Over some time, you will slowly gain experience in price action trading strategy. Once you feel confident with your trading strategy, increase the risk factors slightly. But never trade the market with the money that you can’t afford to lose. Embrace the losing trades and consider it as your business cost.
Educate your properly
Though this article is about the bullish pin bar trading technique, you need to learn more about the price action confirmation signal. The more you will learn about the Japanese candlestick pattern, the better you will become at currency trading business Things will be extremely hard at the initial stage but you know where to learn without risking any real money. Switch to the demo account to improve your trading skills and become a better trader.