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 barIt 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
artic