Pin Bar – MACD Forex Trading Strategy
The pin bar – MACD forex strategy can be used as a standalone system for trading 4 hour currency charts. It requires the use of only one technical indicator and candlestick pin bars. This strategy is very useful for beginners because it does not include a huge number of rules and trading conditions and therefore very easy to understand.
Trading Setup
Time Frame: 4 hour
Currency Pairs: Any
Trading Indicator: MACD – default settings 12,26,9
Pin Bars
Currency Pairs: Any
Trading Indicator: MACD – default settings 12,26,9
Pin Bars
Pin Bars Defined
A bearish pin bar represents a candlestick composed of a long upper wick, small body and small lower wick. (sellers control the Market)
A bullish pin bar represents a candlestick composed of a long lower wick, small body and small upper wick. (buyers control the Market)
A bullish pin bar represents a candlestick composed of a long lower wick, small body and small upper wick. (buyers control the Market)
Rules For A Sell Trade
1) 4 Hour MACD below 0
2) A bearish pin bar appears on the chart.
3) Sell the currency pair at market price on the close of the bearish pin bar.
4) Set safety stop at one pip above the high of the pin bar.
5) Trade objective: 1:2 risk-to-reward ratio or better.
6) Move stop loss to break even at risk-to-reward ratio 1:1
2) A bearish pin bar appears on the chart.
3) Sell the currency pair at market price on the close of the bearish pin bar.
4) Set safety stop at one pip above the high of the pin bar.
5) Trade objective: 1:2 risk-to-reward ratio or better.
6) Move stop loss to break even at risk-to-reward ratio 1:1
Example: Pin Bar MACD Forex Trading Strategy, EUR/USD 4 Hour Chart
The chart above shows two short trade entries in a bearish market (MACD < 0). The first trade was successfully closed for 116 pips of profit. Thesecond trade was stopped out at break even.
Rules For A Buy Trade
1) 4 Hour MACD above 0
2) A bullish pin bar appears on the chart.
3) Buy the currency pair at market price on the close of the bullish pin bar.
4) Set safety stop at one pip below the low of the pin bar.
5) Trade objective: 1:2 risk-to-reward ratio or better.
6) Move stop loss to break even at risk-to-reward ratio 1:1
2) A bullish pin bar appears on the chart.
3) Buy the currency pair at market price on the close of the bullish pin bar.
4) Set safety stop at one pip below the low of the pin bar.
5) Trade objective: 1:2 risk-to-reward ratio or better.
6) Move stop loss to break even at risk-to-reward ratio 1:1
