Example of Pinbars not to Trade
Following on from my article on the pinbars to trade, i thought it would be a useful to identify some pinbars which are not good to trade. Hopefully between that article and this one, you’ll get a better idea of what is defined as a good one to trade and what is a bad one and hence avoid.
Pinbar against a strong trend (unless its a Massive Move Pinbar – see http://www.makemesomemoney.co.uk/select-pinbars-trade/)
Sometimes you see a 1 day reversal in an underlying trend.. quite often this is news related and you find that there is a days strong price movement against the trend. I don’t tend like go for these trades.. too risky particularly if the broad market is going the other way.
Pinbar against a major support or resistance line
Sometimes you get a great looking pinbar like the one in the chart below but if you see support or resistance lines ahead of it, then I prefer not to trade them as you know that there will be buyer or sellers at those locations going against your trade. The trade could work but I rather not take the risk, trading is riskier enough that you only really want to take the lower risk trades.
Here’s another example:
