News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Bearish
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • What's the difference between leading and lagging indicators? Find out from here: https://t.co/vGx8HCagF5 https://t.co/qnQ8Cx0DKv
  • Dealing with the fear of missing out – or FOMO – is a highly valuable skill for traders. Not only can FOMO have a negative emotional impact, it can cloud judgment and overshadow logic. Learn how you can control FOMO in your trading here: https://t.co/lgDf5cVYOn https://t.co/RJLpBgS43V
  • Currency exchange rates are impacted by several factors. Are different world leaders a contributing factor? Find out here: https://t.co/4jsORznRTE https://t.co/6GrWzkOouM
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here: https://t.co/IsnpfJhp91 https://t.co/lIUxpfSem3
  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here: https://t.co/rfwUWJfbz9 https://t.co/8kBulRFd6l
  • MACD who? The Moving Average Convergence Divergence (MACD) is a technical indicator which simply measures the relationship of exponential moving averages (EMA). Find out how you can incorporate MACD into your trading strategy here: https://t.co/ZNs4Qi8ieG https://t.co/6u52PuzIaY
  • Forex quotes reflect the price of different currencies at any point in time. Since a trader’s profit or loss is determined by movements in price, it is essential to develop a sound understanding of how to read currency pairs. Learn how to read quotes here: https://t.co/CNtqrKWDBY https://t.co/rHDy0XNZjQ
  • (Weekly Outlook) Australian Dollar Outlook: AUD/USD Divergence With Wall Street Risks Continuing #AUD $AUDUSD #Fed #Stocks https://www.dailyfx.com/forex/fundamental/forecast/weekly/aud/2021/06/12/Australian-Dollar-Outlook-AUDUSD-Divergence-With-Wall-Street-Risks-Continuing.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/ryxG0fHmzd
  • The US Dollar steadied against most ASEAN currencies this past week. Key support levels remain in play looking at USD/SGD, USD/THB and USD/PHP. USD/IDR may rise with a new trendline. Get your market update from @ddubrovskyFX here:https://t.co/bpr5ZlKIcE https://t.co/0pskmzXZHi
  • EUR/USD has been looking toppy since late May as bearish technical signals played out. But, rising Euro short bets from retail traders hint that the currency may hold its footing. Get your market update from @ddubrovskyFX here:https://t.co/fAZijmQVqh https://t.co/pXICvFE007
EURCAD Forex Pin Bar

EURCAD Forex Pin Bar

Gregory McLeod, Currency Analyst

Talking Points

- Long Wicked Candles can mark significant reversal points at key areas of support and resistance

- Long Wicked Candles show excessive bullishness and bearishness that can be faded

- Though a lagging indicator, a MACD crossover can confirm a change in momentum

Traditionally, aggressive traders enter at market after a Forex Pin Bar is formed. However, the stop placed below the tail of a pin bar could be 200 or more pips. Many times, price will retrace back below the pin bar low stopping a trader out. In other instances traders end up getting chopped up in the market or face an opposing pin bar before exiting the trade at a loss.

Another approach would be to use a lagging indicator, like MACD, to confirm the reversal that was first indicated by the pin bar. Since the pin bar is short for Pinocchio bar, the fictional talking wooden puppet whose nose would grow when he told a lie, MACD can be used like a “lie detector” to confirm if the pin bar is “lying “ or “telling the truth”

Learn Forex: EURCAD Daily Chart Pin Bar

EURCAD_Forex_Pin_Bar_body_Picture_1.png, EURCAD Forex Pin Bar

(Chart Created using Marketscope 2.0 charts)

In the example chart, we can see a strong EURCAD daily chart uptrend. A rising trend line created by a connecting the July 11th swing low at 1.3430 and the September 6th swing low at 1.3651 was successfully tested on November 7th by pin bar at 1.3884. The following day’s candle retraced nearly 62% of the pin bar before rebounding to the top of the pin bar at 1.4094. After ranging a bit, MACD starts moving towards its signal line and we get a large range confirmation candle breaking out of the congestion. Because MACD is an indicator composed of moving averages, it will, by nature lag behind sharp volatile moves and generate fewer false signals. This extra measure of safety is not without a cost, as price could continue to move and not retrace leaving the conservative trader behind. Traders who use this method must accept the fact they may miss trading opportunities.

Placing a stop below the area of congestion and targeting the November highs near 1.4413. We gave up about 90 pips on the trade in order to line up more confirming signals to take this trade but there is still close to 250 pips left and the risk to reward ratio is better than 1:2. MACD crossing over its signal line, combined with a continuation breakout following a bullish daily chart pin bar stack up for a solid trade.

Traits of Successful Traders research by FXCM of over 12 million real trades by clients worldwide in 2009 and 2010 revealed that the number one mistake that traders made was losing more on each losing trade than they made on each winning trade. Lining up as many confirming signals before entering a trade and not relying on only one indicator may help reduce the number of bad trades.

--- Written by Gregory McLeod, Trading Instructor

To contact Gregory McLeod, email gmcleod@dailyfx.com.

To be added to Greg’s e-mail distribution list, please click here.

Follow me on Twitter @gregmcleodtradr.

This article showed you how to combine MACD with the Pin bar candlestick pattern to enter a trade. If you want to expand your knowledge of price action candlesticks, then sign my guestbook and enroll now in a free Candlestick Trading Course. A short 20-minute class will help you become a "Candlestick Master"!

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES