How To Trade Pin Bars Or Hammer Candles.

How to trade pin bars or hammer candles as they are also called. Pin bars or hammers can be traded successfully on any time frame, but they tend to be more reliable on higher time frame charts, such as 4 hour and daily charts. Pin bar reversal candles are great price action set ups when traded correctly.

I personally don’t take trades based solely on pin bars or hammer candles, as my trading style is based on other factors, but lots of traders do trade them, and they do make up a large part of price action Forex trading.

I do however take notice of when pin bar set ups present themselves, as it gives me extra confirmation that i am in the correct trade, and it also helps me define a logical exit for my trades.

How to trade pin bars or hammer candles.

pin bar breakout trade

There are 2 possible entries when trading pin bars or hammer set ups. You can take a breakout entry trade, or you can take a retrace entry trade.

The chart on the right shows how to trade a pin bar breakout entry trade. You enter the trade on the breakout of the low, or the nose as its sometimes called.

The low (nose) is marked by the line, and as soon as the low is broken you will enter the trade short.

pin bar retrace tradeNow lets look at a how to take a retrace entry trade. A retrace entry trade is when you enter the trade on a retrace of the pin bar.

The most common retrace that Forex traders take is the 50% retrace.

If you measure the height of the pin bar, pin to pin, and divide it by 2 you will get your 50% retrace entry target.

You enter the trade short, when the price moves up 50% of the height of the pin bar, as shown by the chart on the right. The line marks the 50% retrace entry point.

Both of these trades show short set ups, but both can be applied to long set ups too. The candles are just inverted for a long set up.

It is important to know how to trade pin bars or hammer candles, as a lot of traders do trade them, and they do work very well if they present themselves at the correct point on the chart.

This is just basic price action trading. What i trade and teach is high probability price action trading. If you wish to learn this type of trading please consider my Forex training course.

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How To Make Money From Forex Trading.

how to make money from forex trading

How to make money from Forex trading.

That is a question that many new Forex traders ask. Now if you break the question down into 3 parts, the answer to the question is a lot easier than you think.

First lets look at the last part of the question. Forex trading. What is Forex trading? Answer. Forex Trading is the speculative trading of one currency against another.

Now lets look at the second part. Make money. To make money you have to invest money. If you invest 5 pounds and you get back 6 pounds, you have made money.

Now lets look at the first part of the question. How to. Now this is by far the most important part of the question, and it will give you the answer you are looking for. If you are asking “how to” do something, what exactly are you asking for? You are asking for knowledge. How to cross the road, how to bake a cake, how to drive a car. All of these skills require you to have the knowledge needed to complete the task.

So lets put all the parts of the question together. I am asking for knowledge, on how to get a return on my investment, in the speculative trading of one currency against another.

Now we know what we are actually asking, and what we are actually seeking, we can now ask the question again. How to make money from Forex trading. The answer to the question is knowledge. Knowledge of how the Forex market works, knowledge of currency pairs, knowledge of risk, knowledge of probability, knowledge of price action.

You have heard the saying knowledge is power right? Well knowledge when it comes to Forex trading is the ultimate power. Knowledge is a super power. Knowledge is success, knowledge is money, knowledge is freedom.

Knowledge is power.

If you want to be a successful Forex trader, and make money from Forex trading, you have to have knowledge. The more knowledge you have, the more successful you will be, the more money you will make, and the more freedom you will have to enjoy that money.

A lot of people tell me that they want to become professional Forex traders. They want to give up their current job, and they want Forex to be their new job. If this is you, ask yourself this question. If you saw an advert for a job as a Forex trader in the city of London would you apply for this job? The answer would probably be no. Why? because you don’t know how to trade. So if you do not have the knowledge and the required skill to get a job as a Forex trader in the city, what makes you think that you can give up your day job and become a full time Forex trader? Can you see the problem?

I am a professional Forex trader, and i can help you become a professional Forex trader, but its not going to happen overnight. To get to the stage where you can give up your job and become a full time Forex trader, you need to have the required knowledge and skill needed to enable you to apply for that job in the city.

Fore more information on how to make money from Forex trading please consider my Forex training course. I will give you all the training, knowledge, and skill needed, to enable you to give up your job, and become a professional Forex trader.

Forex Candlestick Patterns. How To Trade Outside Bars.

What is an outside bar?

how to trade outside barsAnother very common and successful candlestick pattern is an outside bar, or engulfing bar as they are sometimes called, because they engulf the previous candle. Knowing how to trade outside bars will put plenty of pips in your trading account. Outside bar candlestick patterns are far more reliable trading signals than inside bar patterns are. If you know how to trade inside bars then trading outside bars is very much the same.

The picture on the right shows a bearish outside bar candlestick pattern. Here you can see that the bearish red candle is completely outside the bullish green candle. The red candle completely engulfs it, hence the term engulfing bar.

Why are outside bars more reliable than inside bars?

Outside bars represent a total shift in sentiment (in this case from bullish to bearish). The bearish price action in the red candle is far greater than the bullish green candle, so we have had a total shift in sentiment from bullish to bearish. The red candle is twice the size of the green candle which indicates strong selling pressure.

If you compare the outside bar price action to the price action of an inside bar, where the candle is a lot smaller than the preceding mother candle, you can understand that a bigger candle means a bigger shift in sentiment, which equals a more reliable trade, and that is why outside bars are more reliable candlestick patterns than inside bars are.

How to trade outside bars.

The general rules on how to trade outside bars would be to enter the trade at the breakout of the red outside bar. Some traders prefer to see a retrace of the outside bar before taking the trade. The only problem with taking the trade on a retrace of the outside bar, is you may not get a breakout, you may get another inside bar instead, and then the trade becomes a lot less reliable.

My advice would be similar to the advice i gave on how to trade inside bars, which is wait for the breakout, and then look for the retrace, before entering.

For more information on how to trade outside bars please consider my Forex training course.

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