EUR/USD Pin Bar Retracement Entry – Example 1

Filed under: Learn Forex Trading |

 

I am going to show you a couple of examples of a pin bar retracement entry today on the EUR/USD forex currency pair (the pair for the euro and the United States dollar). These are historical examples rather than current ones (as there is little setting up at the moment), and are trades that I took using Forex Tester (www.forextester.com). To begin with, take a look at Figure 1. This is the daily chart for the EUR/USD pair, which is the most reliable timeframe to trade off (as the majority of traders use this timeframe the most), and is the only timeframe that we will need to look at for this particular setup.

 

Figure 1.

Figure 1.

You will see that there is a pin bar at the bottom of the chart, which was at a previous area of support/resistance. Although the pair has pulled back, you can also see that the 8-day exponential moving average is crossed above the 21-day exponential moving average, so the pair is still in a bull trend. What I did here was to put an order in to go long at a 50% retracement of the pin bar, with a stop loss placed just a few pips below the low of the pin bar.

 

As you can see, this order was filled, and price then started to move up nicely with a long bullish candle. However, this was followed by another bearish candle, and at the close of this candle, I moved my stop loss to just below the low of this bearish candle, and this was subsequently hit for a profit around equal to that of the risk. Pin bars at areas of support/resistance tip us off to the fact that the market is more likely to turn, and we can take advantage of this by trading 50% pin bar retracements.

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