EURUSD 1.1851 |
USDJPY 111.52 |
GBPUSD 1.3772 |
AUDUSD 0.7485 |
USDCAD 1.2406 |
GBPJPY 153.59 |
EURJPY 132.15 |
AUDJPY 83.48 |
CADJPY 89.86 |
Silver 26.23 |
Friday's $2431 high in gold consisted of a 21% rise from the Feb 14th low. Such percentage extensions from key lows or/and technical levels such as the 200-DMA, could flag crucial opportunities for partial/full profit-taking. Watch here.
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Montmorency
WooooooW
You spend a lot of time to do this , thanks .
My quest was how important could be a hammer on 1 hourly chart and it is clear the difference between 1 h and daily...btw , nice example with xau chart and the hammer on 05.02 was a really piece of work and i remember very good , even Ashraf has signaled that on twitter .
Now , i will go to sleep for few hours , it will a hard day today (i"m long on eur/usd and wti with medium positions and with pretty conservative stops placed ) .
Cheers
However there are probably many more examples of reversals with no pin bar present. In some cases there are other PA patterns that I can recognise, in others nothing special.
So, if you were depending on just pin bars, you would miss many opportunities.
Some of the other patterns in the "James16" canon are:
-Double Bar High Lower Close DBHLC
-Double Bar Low Higher Close DBLHC
-Double Bar High DBH
-Double Bar Low DBL
- Inside Bar (and variants) IB
-Bullish Outside Bar BUOB
-Bearish Outside Bar BEOB
-Doji (can't remember if James has a name for them)
...
and no doubt you could use other patterns in the Japanese candle pattern library, although my eyes soon start to glaze over with those after a while...
Er, Im sure I had other things to say, but they've gone out of my head for now, so I will close, in hoping this has been of some interest, and that it may provoke thought and discussion.
[Ends]
The name pin pars comes from "Pinocchio" the fictional character whose nose grew when he lied. The idea is that the "nose" of the pin bar is lying - it is pointing in the direction _away_ from where price is likely to go next. It is a reversal signal. However, in the way that this trader teaches it:-
- It's not to much the pin bar itself, but _where_ it occurs that is significant.
- It should be at a swing high or swing low
- It should be at a significant level - e.g. calculated pivot, or de-facto previous turning point (pivot point) ("it" usually being the tip of the nose of the pin, but this can vary).
- The longer the time-frame, the more reliable the signal, i.e. weekly more reliable than daily; daily more reliable than hourly.
- Ideally, it should be supported by the confluence of one or more Fibonacci levels; if more than one, so much the better.
There may be other provisos, but I think those are the main ones. It should be said that in this method, other price action (PA) candle patterns are also used in a similar way, but I will stick to pins here.
As I have said elsewhere, after I started taking more notice of fundamentals, I began to trade less and less on pure PA (including pins and other patterns). However, I was just looking at the daily gold chart, and noticed a few interesting things. I've put up the chart from this site, but the chart I am really looking at goes back further. Also mine is GMT, so it won't be identical anyway.
I'm just scanning the last 6 months or so from left to right on my daily chart, looking for pin bars, which I will number:-
1. 27 Nov 2009, there is a massive bullish pin - does not quite conform to type since it is not indicating reversal of trend, but continuation
2. 22 Dec 2009 - not quite a pin in his definition (nose too small), but it did signal a trend reversal, at least a short one.
3. 11 Jan 2010 - a trend reversal - and is that a bearish pin? Maybe.
4. 3 Feb 2010 - again, not quite a bearish pin, but (in this case) a trend contiuation, not reversal.
5. 5 Feb 2010 - Now here's a beauty: distinctive bullish pin with a real trend reversal
6. 24-25 Feb - 2 successive pins - trend continuation.
7. 3-4 March 2010 - there is a change of direction (longish pull-back rather than change of trend I would say) with no pin, although some might recognise other PA patterns here.
8. 24 Mar 2010 - now that's kind of a pin, but it's not working in the usual direction - the nose isn't going in the opposite direction of the move, but the same - anyway, upward trend resumes.
9. 12 April - pullback - not really a pin though.
10. 19 April - now there's a nice bullish pin, and up it goes.
11. 4 May 2010 - here we have a bearish pullback (no pin), followed immediately by
12 5 May 2010 - bullish pin, indicating (presumably) a resumption of the uptrend.
Now one of the reasons it's quite hard to trade these on the longer T/Fs, even though they may be more reliable than say, the 1H, is that (obviously), they don't occur all that often (even less often on the weekly chart). There are other reasons why they can be hard to trade, but I don't want to get too bogged down in detail here.
As I have said, I don't take as much notice of these as I used to, but perhaps I have been neglecting them somewhat. If pin bars (or more generally, Price Action) can be effective (at least on longer T/F charts) on their own, if they are also supported by fundamentals, they could be quite powerful, don't you think?
I'm now just looking back on my (broker's) copy of the chart, to see if I have been suffering from "selection bias" - am I just picking out those that worked and ignoring those that didn't?
Well, that is always a danger, and something to beware of.
I've only done a quick scan by eye, going back to 2001, and my immediate impression is:
- There are many examples of pin bars apparently signalling either a trend reversal, a significant pullback, or a significant trend resumption/continuation after a pullback.
- However there are probably many more examples of reversals with no pin bar pre
I got to thinking about this after Radu raised a point about hammers on the hourly chart in another thread. If I can get my act together, I'll post more on this topic in "Trading".
I think we'll see a kind of gold rush when EUR rebounds and UST yield drops but we won't see raising gold as long as EUR uncertainty persists. Gold is already priced for Eur uncertainty it cannot get more uncertain unless EUR eventually breaks up.