PipKey
is a price action strategy based on Pin Bar with moving average.
So
now that we know that pin bars can signal market reversals and that
the market likes to find support and resistance at moving averages,
how do we combine those two things to make a few bucks out of the
market? Well, when the market is trending, we can wait for the market
to pull back to the moving average and then watch for a pin bar to
form. So let’s take a look at a few examples.
First
we need to qualify what a proper pin bar is and how to trade it.
1.
A pin bar can't close higher than the shadow of the previous candle
for a bearish pin bar and can't close lower than the shadow of the
previous candle for a bullish pin bar.
2.
The “pin” or shadow of the pin bar has to stick out from the
candlesticks around it.
3.
The really good ones will have a shadow that is as long as or longer
than its real body.
Now
for the entry rules:
1.
The pin bar finds support in an uptrend at the 21 EMA (exponential
moving average).
2.
Place a pending order 5-10 pips above the high of the pin bar.
3.
Place a stop loss 5-10 pips below the low of the pin bar.
4.
If entry is not signalled within 3-5 candles, delete the pending
order and wait for the next signal.
The
opposite is true for a downtrend:
1.
The pin bar finds resistance in a downtrend at the 21 EMA.
2.
Place a pending order 5-10 pips below the low of the pin bar.
3.
Place a stop loss 5-10 pips above the high of the pin bar.
4.
If entry is not triggered within 3-5 candles delete the pending order
and wait for the next signal.
This
method works best when trading with the trend and that's what we'll
be doing so let’s get to some examples. First we'll take a look at
an uptrend and look for price to find support at the 21 EMA and then
look for a pin bar.
When
we're placing our targets we really want to be able to make at least
a 1:1 profit.
That
means that if we're risking 50 pips we want to make at least 50 pips.
This move definitely hit a 1:1 profit target.
Here's
another example of price finding support and creating a pin bar at
the 21 EMA.
On
the very next candle, we got our entry and price went on to hit our
1:1 target very easily. 
Now
let’s have a look at a downtrend.
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