Trade Example – EUR/USD

Filed under: Learn Forex Trading |

Let’s revisit the 50% retracement pin bar in a strong trend today – and I have two very nice examples of this on the EUR/USD chart, which happened in quick succession.

 

Figure 1.

Figure 1.

If you take a look at Figure 1, you will see the examples in question. As you can see, the first pin bar happened at a very nice level of support/resistance. I put an order in at a 50% retracement of the pin bar, with a stop loss placed as usual just a few pips above the high of the pin bar, and I had no target set as I intended to manage the trade. After the white bull candle, I then moved my stop loss to a few pips above the high of the bullish candle, and this was then hit.

 

However, another bearish pin bar soon followed this – and I made a similar trade, entering at a 50% retracement of the pin bar, with a stop loss again placed just a few pips above the high of the pin bar, and no target set. Again, this order was filled and it moved into some nice profits. However, when a bullish pin bar formed, I moved my stop loss to just a few pips above the high of the bullish pin to lock in some profits, and this was again subsequently hit with a very large bullish candle following. These two trades made a cumulative profit of around 2.7 times the risk, so with a risk of $100 per trade, that is $270 worth of profit. Although this particular setup does not of course work out every time, over the long term, it does seem to have a notable edge; and as such, I will keep on using this setup until that edge disappears.

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