As a forex trader, you are keen; you shall notice that some bars or candles are formed with a long tail or wick than the body. These are called chart pin bars or exhaustion candles. They can be bearish or bullish chart pin bars.
The bullish chart Pin Bar has a tail end that points down. It shows there is a market price reversal that is about to happen. If you place an arrow at its tail facing the body, it will point to the direction of the chart reversal, which in this case is upwards. This bullish chart candle shows that the market is rejecting further lower prices or levels of support. Therefore if such a chart candle is formed, the prices will likely rise.
The bearish chart pin bars have their tail end pointing upwards. If you place an arrow at its tail facing the body, the arrow will point to the direction of the chart reversal, which in this case is downwards. This bullish chart candle shows that the market is rejecting any further higher prices or a level of resistance. As a forex trader, if such a candle (exhaustion) forms, then are prepared for prices to head downwards.
As a forex trader, you should target the close of the chart pin bar and then open a forex trade in the direction that the pin bar points (placing an arrow at the tail end pointing to the body).
However, it is tricky to determine how far the predicted trend will go after opening a position. When you enter a live trade, you are targeting good profits as fast as possible. So you must be very sure when to put trade and when to close the trade.
Based on the above drawback, you must combine pin bars with an indicator to get a 100% result. The most convenient forex indicator to use is the fxi_pivot point indicator.
Fix pivot point Forex indicator
This forex indicator shows the daily lows and highs. It draws the line at the lowest prices of each day, and this line is called the support level. It also draws another line at each day’s highs, referred to as the chart resistances.
It also has another chart line in between the chart supports and resistances, which indicates the forex market price level at which the day closes.
Inserting the pivot point indicator
Download the indicator (scroll down the page to download FXI Pivots.ex4), and save it in the forex indicators folder in the MQL4 folder. This is done by opening the forex MT4 platform and clicking the file button at the top left corner. Then click on open data folder.
After copying the indicator, close the mt4 platform and open it again.
Then click insert, then the custom, and scroll down to locate the fxi_pivot point indicator and double click it. Then click ok on the pop-up box that appears.
You are now good to go!
Fig.2. fix pivot point indicator on the chart.
Using the fxi pivot point forex indicator with the pin bars
In this trading strategy, you look for the pin bars that form at the chart resistances or supports. Then you put trade at the close of the chart pin bar or exhaustion candle.
Be sure to place a stop loss(SL) at the end of the pin bar tail. This will ensure that you are safe if the market misbehaves due to other factors like news or pressure from forex traders.
Then place your take profit(TP) at the nearest previous 3rd-day support or resistance level in case of a bullish bar or chart resistance or support level in case of a bearish candle bar. You start with the chart pin bar has formed.
This forex strategy will give you 95% and above good returns.
Fig.3. Combining forex pin bars and fxi pivot point indicator.
From figure 3 above, as a forex trader, you are to put a buy order at the closing of the second chart pin bar as shown, then take your profit as shown. You realize that if you had opened the order at the close of the first chart pin bar and put your stop loss(SL) at the end of the tail, you would still take your profits. The blue numbers show the count to the third previous day support.
Fxi Pivot Point Forex Indicator Free Download