What does it do? When should you use it? All of your questions answered about our Pin Bar Indicator…
What does it do?
The Littlefish FX Pin Bar Indicator is a NinjaTrader 7 tool which pretty much does what it says on the tin – it highlights the powerful Pin Bar candlestick on your platform for you.
What’s the best thing about it?
The beauty of this indicator is that it totally removes the subjectivity from identifying Pin Bars and instead of wasting valuable time scanning the markets for Pin Bars, you can simply set an alert on the Indicator, meaning you only have to check the screens when you receive an alert.
The Pin Bar is one of the most powerful candlesticks for highlighting potential reversals. As you can see in the image above, many Pin Bars are successful on a raw basis, simply trading them as they appear, but when you begin to apply filters to your Pin Bar selection and use the indicator in conjunction with some other tools such as RSI Divergence, Support & Resistance levels and even our own COT Data indicator, you will quickly establish a solid system.
How and when should I use it?
Lets take a look at some methods.
Pin Bar Indicator With RSI Divergence
In the image above we can see price makes a new low through a double bottom as RSI displays clear bullish divergence. At this time we also see the Indicator highlight 3 Pin Bars, giving us a strong signal to enter the market. As price breaks higher from the bullish Pin Bars we then see two more bullish pin bars highlighted allowing us to add to our position as price breaks higher with the RSI until finally the RSI reaches overbought levels and we exit our position, shortly before price reverses lower.
Pin Bar Indicator With Support & Resistance
In the above image we can see many Pin Bars highlighted, the majority of which move into profit although not following through in as sustained a manner as we would like. However, the Pin Bar which really does run away is the Pin Bar at the Double Top. Trading Pin Bars which form at clear Support & Resistance levels is an incredibly profitable strategy and made even easier with the Pin Bar Indicator.
Once you begin to combine two of the analysis methods with the Indicator you can really see the potential for extracting profits. Taking the Pin Bar at the double top shown above, we can apply RSI divergence to the signal to really confirm our trade.
Pin Bar Indicator with COT Indicator
Now we take a look at the really exciting stuff. Combining two of our very own indicators here, we start to get an idea of just how profitable the Pin Bars can be.
In the image above, we can see that the green line crosses through the blue to the upside, signalling that Banks and Financial Institutions are buying the currency pair. As such we want to follow their direction and only take bullish Pin Bars which the Pin Bar Indicator kindly highlights for us with a green arrow. As the Green Line (the one we want to follow) continues to trend higher and stay at highs we want to keep buying bullish Pin Bars, which as the image above shows, continue to pay out!
Are there any more features to the Pin Bar Indicator?
Sure, you can alter the parameters to select your desired:
- Significant Ratio, which is the size of the Pin Bar tail to the nose and body.
- Pin Bar Size, which is the total pip size of the bar
- Breakout Period, Which defines the Pin Bar as the highest high or lowest low in a given number of bars.
- Breakout Size, which is the minimum difference between the highest high and lowest low of the breakout period.
The adjustable parameters of this indicator are what make it really special. Having the ability to scan for different size Pin Bars at different size breakout periods allows you to really get to grips with which Pin Bars have the highest likelihood of being profitable.
Got any video tutorials?
Most certainly – let’s take a look at these settings and how to manipulate them to your advantage in our short video below…