Pin Bar System

[cristiano]

Good stuff pozzyp.
You mention pin length being significant - that's where the subtlety of this system lies imo. There's quite a lot of subjectivity to which pins to take, reckon pocrel would put it down to screen time. Really having a feel for which setups are the strongest. His trade on the Dax yesterday was great, even though the pin wasn't a typical/classic/obvious pin bar.

When you say tail length, do you mean the overall bar length (ie high-low) or are you talking about distance from what would be the top/bottom of the body of a candle to the end of the pin?

Cheers, Chris

 

[Phiksalamuk]

Short alert forming on AUD. I hesitate to take it as there is a rising trend line on the way to the lower pivot...(???).

 

[Phiksalamuk]

Short alert forming on AUD. I hesitate to take it as there is a rising trend line on the way to the lower pivot...(???).

I think I'll pass on that one as setting exit to the rising trendline would give a lower than 1 R:R.

 

[SurfDog]

Pozzy thats very interesting, have you done any analysis on the indexes?

 

[SurfDog]

short trigger in cable. set up consists of 2 more favourable conditions: a double top at R2 and if you switch to lower TF you see bearish divergence.

Nice spot DDI, 25 pips in the bag

 

[advfntrader]

nice research pozzyp - what do you code and backtest on , MT4 ?

 

[brettus]

Nice spot DDI, 25 pips in the bag

touche..Still think it has be R:R 1:1 for a trade for me.

 

[DDI]

Hi DDI,

According to my pivots, R:R would be too low (R1 is 16108) and low of pin bar for me would be 16125.

yep I got lucky and bagged 23 pips and couldve been more as it spiked through support but the R:R didnt look great

Nice spot DDI, 25 pips in the bag

cheers mate..

I think oil set up looks good, I have order to short if it breaks low of last 2 pins (same levels). Although my fav indicator ADX/DMI shows strong upward trend but it still allows for 30-40 pip downward move..

 

[SurfDog]

touche..Still think it has be R:R 1:1 for a trade for me.

Having a little breather at yesterdays highs brettus, maybe back down to the pivot and beyond if it takes those out...

 

[pozzyp]

nice research pozzyp - what do you code and backtest on , MT4 ?

I coded it in Multicharts so its an EL file, the firm I'm at has a centralised data exchange so the price feed comes from there.

 

[pozzyp]

Good stuff pozzyp.
You mention pin length being significant - that's where the subtlety of this system lies imo. There's quite a lot of subjectivity to which pins to take, reckon pocrel would put it down to screen time. Really having a feel for which setups are the strongest. His trade on the Dax yesterday was great, even though the pin wasn't a typical/classic/obvious pin bar.

When you say tail length, do you mean the overall bar length (ie high-low) or are you talking about distance from what would be the top/bottom of the body of a candle to the end of the pin?

Cheers, Chris

tail length just mean the length of the wick of the candle not the overall bar length.

so if close > open then will be (open - low) = tail length and vice versa if its a bearish bar.

Pin size is the distance from the top/ bottom of the body of a candle. sorry if that's confusing think its my fuzzy logic and poor code.

 

[cristiano]

sorry if that's confusing think its my fuzzy logic and poor code.

Could be - or could be that I'm a bit slow.
Cheers

 

[DDI]

I think oil set up looks good, I have order to short if it breaks low of last 2 pins (same levels). Although my fav indicator ADX/DMI shows strong upward trend but it still allows for 30-40 pip downward move..

Actually I am now long oil as the high of the pins was broken to the upside (plus ADX looking bullish)..however not sure if on pocrels system this qualifies a long as both pins were bearish..in any case having a stab with small stake.

 

[mags_g]

Been a busy morning for me but I managed to get aboard the FTSE and GBP/USD before I popped out. Just got back and good to see I have not been stopped out!

 

[Phiksalamuk]

Nice small pin for USDCAD at Weekly S2. Has broken up strongly. Now in free trade. Missed it !

 

[mags_g]

I though about this one on the AUD/USD but got my hands full at the moment >>>

 

[Phiksalamuk]

I though about this one on the AUD/USD but got my hands full at the moment >>>

Yes. I spot it as well, but there is a rising trendline before next pivot level. Taking exit at trendline would give RR below 1. That's why I didn't enter. Don't know what Pocrel would do in that case....:?:

 

[MajorDutch]

Good work I would be very interested to know the results for 2:1 R:R ratio looking at longer candles only.

Hi Everyone,

Did a little back test on this strat and thought I would throw in my 2 cents not sure if my findings provide any real value to anyone.

I’ve coded up a few different versions of the concept, the first is using a simple version of Pocrels method. Looking for pin bars at floor pivots. I used a loose definition of a pin bar. The tail has to cross the pivot point and the pivot cannot cross the body of the candle. I have added two other variables, the length of the tail for the bar and also the size of the pin (how close to the opposite end of the tail it is).


Please note results are subject to my data and my poor coding so I’m sure they will differ from others.

Im running a fixed stop and fixed TP of 50/50 ( I know this isn’t the strat but it’s just a starting point to see if the pattern at these levels has any validility)

EURJPY: since Jan 2010(In sample): 67 trades
61.22% win rate
Avrg trade: 12.8 ticks (not including slippage or comss but this is still very good)

EURJPY: since Jan 2008: 180 trades
58.33% win rate
Avrg trade: 9.4 ticks (not as good but still decent)

Both these performances are good and results over the last year / 18 months are very good. Whats interesting is that if we take the period back further unfortunately the strat dies a little.


EURJPY Jan 2006 – Jan 2008: 133 trades
51.88% win rate
Avrg: 2.2 ticks (slippage and comms would kill this however its still a positive result)

I’ve attached copies of the equity curve over the last 2 and 4 years so you can see.

As I said before these are relatively generic results but the main thing to see is whether or not the strategy has any validity and you can clearly see that from the results there’s definitely money to be made by trading pin bar reversals at floor trader pivots.

The other interesting finding is the length of the tail to the pin has a large impact on the strategies performance. The longer the tail the stronger the signal, I tested a variety of lengths and around 10 ticks seems to be good.

I have results for other pairs and other timeframes as well as trying the same pin setup at yesterdays high/low and last weeks high/ low etc. Dont want to clog up the thread so let me know if you want me to post or not.

 

[mags_g]

Thanks Pocrel >>>>

 

[advfntrader]

only problem I can see with this system is you are trading against the trend, in an uptrend selling R1, R2 etc. will only give so many pips before uptrend continues. Also you seem to be buying at R1 and target at R2? should you not only ever sell at R and buy at S ?