Trading The Pin Bars On Weekly Timeframe!

Pin Bars are important candlestick patterns. Pin Bars are also know as Lucky Spike. Did you read the Lucky Spike Scalping Strategy that showed how you could used these pin bars for scalping on the higher timeframes like the daily and the weekly. Many traders have this misconception that scalping can only be done on the lower timeframes. However this is a misconception as you can very much do scalping on the higher timeframes as well. When this pin bar pattern appears on the daily and the weekly timeframe, it can be a strong signal for a trend reversal if it coincides with a fibonacci level. Take a look at the following screenshot.

Pin Bar Candlestick Pattern

If you take a look at the 23.6% fibo level, you will find two pin bars forming together. The two pin bars forming at the 23.6% fibonacci level is a strong signal for a trend reversal. This is a signal for a strong up move. This is precisely what happened, price moved up by 500 pips in the next 2 weeks. You can read this DailyFX article on how to trade with Pin Bars as it explains how to trade the Fake Pin Bars.

Now if you trade these pin bars on the weekly timeframe, you will need a huge stop loss of 250 pips. Position traders are happy trading with huge stop losses as they continue in a position for a long time. But we swing traders are shy of using such huge stop losses. We are not willing to risk more than 50-100 pips per trade. So we use lower timeframes like the daily and the 4 hourly to reduce the stop loss and the risk. I will explain in the next post how I traded this pin bar patterns on the weekly timeframe using H4 and D1 timeframes. But you should develop the habit of regularly taking a look at the weekly timeframe as it is an important timeframe that tells you about the long term trend in the market that can last for months. If you take a look at the 100% fibonacci level, you will once again find a pin bar forming. This started a strong down move that last for a few months and price dropped by more than 1500 pips in 3 months. So when you are trading on the H4 or the D1 timeframe, regularly check the weekly timeframe as it will tell you what the long term trend is. Then you can use the lower timeframes to plan your trades.

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