4 limitations of Forex Pin Bar entries, even with a Pin Bar indicator

4 limitations of Forex Pin Bar entries, even with a Pin Bar indicator

4 limitations of Forex Pin Bar entries, even with a Pin Bar indicator

Pin Bar reversal signals are one of the most reliable reversal signals you can possibly trade. They always have a very high probability of success. Some traders use a pin bar indicator to find pin bars but most trader can spot them visually very quickly.

There are however 4 Pin Bar trading limitations all Forex traders should be aware of:

1.Pin Bars are lagging signals.

By their very nature the price has to travel a fair distance and then return a fair distance to make up the pin bar wick or long nose. Sometimes the point of entry is well over 100 pips of the new trend. This makes one of the biggest lagging signals in technical analysis.

2.Pin bar signals and entries have many criteria before they are valid Forex entries.

There are many criteria Pin Bars have to meet to be a valid entry signal.  Some of these include that

  • Trading has to be in the right timeframe
  • Pin Bars have to be in particular locations compared to other recent trends in the market
  • The wicks  have to be sticking out and away from other price action activities
  • Spikes have to meet basic criteria with the wick being a minimum of 3 times the length of the candle body. The nose must protrude and must open and close with the previous candle etc.

Some traders get confused or develop their own rules about pin Bar trading

3.Pin Bar signals work best on long time frames

Pin bar signals work best in the long timeframe so traders can go days, weeks and even months without a signal in a particular currency. Trading frequency is a major psychological problem for some traders

4.There could be better entries using the pin bar spike

Certain support and resistance traders using trend-lines and channel lines are able to predict the end of a pin bar spike with a very high success level. This often gives them an over 100 pip advantage over pin bar entry traders.

These 4 limitations of Forex Pin Bar entries, even when using a pin bar indicator mean that traders have to have other methods of trading to get the best out of the Forex Market.

 

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