The Pin Bar : Some Final Thoughts

The Pin Bar : Some Final Thoughts

Remember that it is fine to trade less frequently than everyone else. If 90% of forex traders will fail it is because many of these traders have ‘an itch’ to trade and feel that they need to be making many trades to make good money. Do not be like them. Select the best pins and aim for longer time frames if you want to gain money. When Jim is providing trading examples he explains that good traders should be hunting with a rifle from the bushes – they wait for the best setup (using pin bars in this case) then nail the trade. Over a one month period you may only find one good pin bar setup for each currency pair.
 If you look at six currency pairs this would be six good pin bars in a month. This might be all you trade for the month but traders can still make good money by exercising patience this way. Jim recommends that traders who are new to using pin bars use the 4-hour time period as the minimum time period and only try trading on time frames smaller than this when more experienced. Daily and weekly pins are better and are more reliable.
Also note that if you trade with longer time periods you will have much larger stops; the range of price movement in a 1 week period is considerably greater than the range of price movement in a 4 hour period. It may be necessary to carefully select a broker that allows you to have micro-lots ($1000 lots) so you can put on a position size that suits your risk. (Some brokers such as which allows you to take a position of any dollar size! This is not a recommendation as to which broker you use but to point out that a trader with a small account size can efficiently manage risk even with large stop losses.)

Playing daily or weekly pins also means that you are not glued to your computer. You can check in a couple of times a day to monitor your trades and shift your stop losses as appropriate. Demo trade pin bars first. When you can trade them profitably for 3 months then open a small account (with a broker like that provides a lot of flexibility in position sizes, or another broker that allows micro-lots to be traded). Trade with the money in this account until you can trade profitably for three months. Make sure you are using small position sizes when you start to trade using real money. Then begin to trade with your full size account or with larger position sizes.

FijiTrader has recommended to some new traders that they start trading risking a small amount of their trading capital with every trade. An appropriate level to start at may be 0.5% (yes, half a percent) of the trading capital. This allows new traders to become used to the emotional and psychological aspects of trading real money. Each week the amount risked may be increase by 0.1% until the trader reaches a position size that they are finally comfortable risking on each trade (probably 2-3%).

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