Price Action Trading Patterns: Pin Bars, Fakey’s, Inside Bars
In this Forex trading lesson, I am going to share with you three of my favorite price action trading strategies;
pin bars, inside bars and fakeys. These trading setups are simple yet
very powerful, and if you learn to trade them with discipline and
patience you will have a very potent Forex trading edge.
Whilst these three setups are my ‘core’
setups, there are many other versions and variations of them that we
focus on in our members’ community and advanced price action trading
course. However, you can learn some good basics in this article to lay
the foundation for future learning. So, without further delay, let’s get
this party started…
Pin Bar Setup:The pin bar is a staple of the way I trade the Forex market. It has a very high accuracy rate in trending markets and especially when occurring at a confluent level. Pin bars occurring at important support and resistance levels are generally very accurate setups. Pin bars can be taken counter trend as well, as long as they are very well defined and protrude significantly from the surrounding price bars, indicating a strong rejection has occurred, and preferably only on the daily chart time frame. See the illustration to the right for an example of a bearish pin bar (1st bar) and a bullish pin bar (2nd bar) —>
In the following chart example we will take a look at pin bars occurring within the context of a trending market; my favorite way to trade them. Also, note that this uptrend began on the back of two bullish pin bars that brought an end to the existing downtrend.
Fakey Setup:
The fakey trading strategy is another bread and butter price action setup. It indicates rejection of an important level within the market. Often times the market will appear to be headed one direction and then reverse, sucking all the amateurs in as the professionals push price back in the opposite direction. The fakey setup can set off some pretty big moves in the Forex market.
As we can see in the illustration to the right, the fakey pattern essentially consists of an inside bar–> setup followed by a false break of that inside bar and then a close back within its range. The fakey entry is triggered as price moves back up past the high of the inside bar (or the low in the case of a bearish fakey).
In the chart below we can see the market was recently moving higher before the fakey formed. Note the fakey was formed on the false-break of an inside bar setup that occurred as all the amateurs tried to pick the market top, the pros then stepped in and flushed out all the amateurs in a flurry of buying…
Inside Bar Setup:
The inside bar is a great trend continuation signal, but it can also be used as a turning point signal. However, the first way to learn how to trade the inside bar strategy is as a continuation signal, so that is what we will focus on here, more info on the inside bar and all the ways to trade it can be found in my advanced price action trading course. As we can see in the illustration to the right, an inside bar is completely contained within the range of–> the previous bar
It shows a brief consolidation and then a break out in the dominant trend direction. Inside bars are best played on daily and weekly charts. They allow for very small risks and yet very large rewards. The inside bar strategy combined with a very strongly trending market is one of my favorite price action setups.
In the example below, we are looking at a current (as of this writing) EURUSD inside bar trade setup that has come off to the downside with the existing bearish market momentum. We can see a nice inside bar setup formed just after the market broke down below a key support level, the setup has since come off significantly lower and is still falling towards the next support at 1.2625, as of this writing. Many of our members are in on this trade as we’ve discussed it extensively in both the members forum and the daily member’s commentary.
As you can see from the three examples above, Forex trading does not have to be complicated or involve plastering messy and confusing indicators all over your charts. Once you master a few solid price action setups like the ones above and the others in my Forex trading course, you will be well on your way to becoming a more confident and profitable trader, just remember, mastering these setups will require patience, dedication and discipline.
I am so grateful to you giving me valid information which will help me.i just want to ask if this stratergy can be applied in one hour time frame.can u suggest me best time frame to trade.as of now am totally free can i use one hour time frame.
Regards,
Sreekumar.
Thanks for all your valuable information you are sharing with traders.
But i have seen these forms of pin bars, inside pin bars, … in the history of charts for different time frames without this form of moving and during 5 years of trading i could not use them as you have mentioned above. Even i have written all the important necessary shape, forms, … and follow step to step and 1 out of 10 times they were accurate.
How can you explain these problems?
Best wishes
imi
You found the HOLY GRAIL, i love this set up.
More blessings to come.
Cheers,
Allan Villanueva fr. Philippines
I have learn this put up and if I could I desire to couunsel you ssome interesting issues
or suggestions. Maybe you can write subsequent articles referring to this
article. I want to learn even more things about it!
I really impress with your Price Action Trading Strategy. It’s good strategy for me.
Thank you for your sharing!
Presumably you look for the momentum switch or pin bar on the daily chart and place your trade on the 4hr?
Also, what determines your target?
Is it the next two candle cluster on the daily chart from where you have entered?
Also, what determines your STOP loss. Is this above or below the fractal closest to live price on the 4hr chart?
Kind regards
Paul Cowley
This is all new to me, but thankyou. I want to learn more and be a very good trader..
please am a new trader and i want you to teach me how to trade the market very well.
i just started a demo accounts.
I will try to master some of it. Thank you,
Thank You
Puvan
The average teacher explains complexity; the gifted teacher reveals simplicity.
Thanks thanks thanks thanks…
I never knew that price action is the best thing after…. well.. after price action and candle pattern pin bar very good effect ?
You have reiterated my belief that trading is not about luck ; its about putting in the long yards and then earning some money.
its been 2 days now that I am reading your articles and I’ve been learning more then the last couple of months. I test your set ups and tips directly after I read them and its amazing how good they actually work.
You have the gift of explaining forex in a simple and direct way AND you are willing to share your knowledge. Thats just awesome man.
Thank you very much, I will keep an close eye on your website, so much more to discover…
George
Festus O
what is your EMA in above pictures?
I really appreciate your price action tutorials.Thanks so much.
Thank you for the course.Highly appreciated
Love your way doing forex. Like to master price action trading. After 8 years of trading, tried this even I’m new, I feel relax doing trading. Will study more with your guidance.
Thanks
Thank you very much.
Normallyreachme427.
I am new comer &stillneed more learning, hope your lessons will be great help to me.
Wish you all success and happiness . Saowani
I am new here,am still need more learning your technical.Thank you for your lesson.Have a good weekend Nial.
This is quintessence of Price Action. The price tell us all about yourself on charts we only have to learn read these messages! Thanks. You are really the Best.
Vic.
Is it possible to see pin bars, inside bars and fakey at the same time in the chart? If yes, how often this happen and what is your interpretation for that?
Mussie
For the Fakey set up, what would be the maximum number of inside bar (between the mother candle and the final fakey candle) that you d consider?
Seems like 4 inside bars is already a lot, what do you think?
thx
Regards
I will use everything you teach … God bless ….
I said it once and I will say it again.
Nial… you have the magic to make it happen, everything looks so easy
after you explain the way it works.
Thanks for your knowledge and for sharing it with us.
Alfredo Garcia (ALF)
But there is one persist problem ” probability” its no go awy.
Thank you so much
I salute you Mr, you are a man of GOD.
I just discovered your “jewel of the down under”. Your website is awesome, I have been doing Forex for many years but because of finding the right info, I put it aside but sometimes I like to read all about strategies. Signed up for your newsletter, downloaded the NY 5-day charts from Axitrader and I am looking forward to purchase your price action course. I am a technical analysis guy and love to trade off the charts. I have started to read each one of your blog posts, so I’ll be busy for a while. Because of your pinbar strategy I understand the candlestick a lot better. Price action is where the real money is. Loved your crocodile article. Thanks so much…
Thanks!
Great article. Thanks alotttttt :)
your articles and strats are awesome, from what i have read thus far it has improved my trading 10 fold.
great stuff
regards
mark
Your articles are just super. You describe in a very pointed manner using just a few words how to spot good setups.
Thanks a ton. You rock.
fakey setup.
hope to hear from you soon.
thanks
I have to start caling you Sir Nial, thank you for the heads up, simple and clear.
Regards,
Richard
I found good knowledge from your site.
Thank you very much.
The strategies that you have shared look great but just wondering how am i going to monitor the pattern formation since it is suitable to trade in a longer timeframe? It seems i have to sit in front of the computer for the whole day or even few days just to wait for it to form or else most of the times i will miss out the trade opportunities.
I am reading this article the third time round. Sometimes I can see an inside bar but where the tail of the inside candles protrudes a little outside the mother bar. My question is should i still consider this an inside bar or its not?
I find your info educational but I’m more of a stocks trader and does your resources apply to stocks as well? THanks in advance!
your trading technique has been an eye opener. once i was blind but now i can see! remain bless
Thank you.
Been a member almost a week now. WHAT A WEEK! THANKS!
Going to be a WHALE of a journey. Great feeling knowing you have an experienced captan-mentor and a crew nearby that has your same intersts and speaks your same language.
No more solidary sailing!
Really feeling the need for a course workbook with related problems and answers so that we can test and check ourselves
on our progress. Is that a future possibility? If so, I would like to be on your development and feedback team.
Thanks Larry
Great site, I like the idea of trading only two or three strategies.
Do you find the setups work best with any particular currency pairs?
Kevin (England)
This is my first time receive your email, I am so intersted in your PRice Action strategic, I Had found the right method, but becouse English is not my mother language, some time I cannot clearly understand some words/phrase, any sugestions? thanks GBU
Sukoyo (Indonesia)
thank you again for your generousity in sharing this info…I am counting the days to buy your course and see what else you have to say :)
Your work is very inspiring and revealing.Reading and listening to those videos marked a turning point in my trading life.
Thanks for giving it back to the society.
Besides, can you redefind in-side bar? Is the thread of the of the candle considered also or is it only the body?
This clearification will help a lot.
Thank for the good work and remain bless.
nial you are an angel.
In the second chart, the “Fakey” also seems to be a pin bar.
Is that further validation of a feasible trade?
Thanks for these excellent tips.
John
I will eventually register.
The pin bars and fakey set ups are quite interesting.
I am glad I opened your website.
thak you very much for yr usefull info.
much aprreciated.thanks again.
Thanks Nial!
Thank you for the help, its really great.
Kati
I re-read your articles to get a clear picture of price action setups. Thank u v much for your sincerity in helping beginners.
Rikus
Great info and this really is very helpful.
Short and clear, excellent.
Regards
Tomson
I’ve been micro trading whilst trying to grasp your trading methods. I’ve made some appalling mistakes,but thanks to your generosity i am aware of what i didn’t do properly and feel much more confident about trading profitably with my meagre funds. I committed before that i will sign up for your course and attest to that promise here again. Cheers
Thanks
Rather straight forward. Clear. Time to journal one of your primary “price action” setups. Which one? Hummm
I really want to thank you for your material on price action setup which as really help me to improve my knowledge in forex trading, God bless you and wishing you the very best in the new year and the years to come, a very big thank you.
Best Regards
Jonah (UK)
I am grateful for your the materials, its really comprehensive. I am very grateful for it. more grease to your elbow. Thanks very much.
Thanks for the top advice Nial on taking a 4 hour + view point on the markets.
Thanks thanks thanks thanks…
I never knew that price action is the best thing after…. well.. after price action!!
I am forever indebted to you!
Do you designate a bar an inside bar based upon using the wicks of both the mother bar and the following bar or do you just use the bodies of the two bars to make this determination?
As always thank you for your help.
Ricky
With your knowledge and your teaching material you are giving me a great set of tools to improve and succeed trading the market, you have a great name of the site “learn to trade the market” you honnor it, and I am in the right way to do it!!
Thank you very much!!
José.
Thanks Nial
I will try everything out in my demo and give you the feedback.
Cheers
How do we keep using meta trader as a demo account with our trading? i opened one but it is only giving me one month free account.
have a good one.
I am using a meta trader trading platform which does not show it as a pin bar at all! Is it possible that different platforms could be so different? The platform i am using shows price open 87.33, close 85.14,
hi 87.48, lo 84.80? Appreciate your opinion, PW
Michael
Ken