Price Action Part 2: Pin Bar and Inside/Outside for forex trading strategy

Price Action Part 2: Pin Bar and Inside/Outside for forex trading strategy


Hello, Konnichiwa. This is Kei and I am a professional
trader in Tokyo, Japan. In this part 2 of price action video series,
I will be talking about another 4 common patterns and how you can trade with those signals. So if you like this video already, please
press a good button, and let’s get started right now! Alright, the first one I am introducing is
spike low. Look at this chart. As it says here, it really works when this
shows up during the down trend. How you can identify this is that the low
should be clearly all the way down from the previous low, I mean, the wick pointing downwards
should be especially long like this in this chart example. And when you find this pin bar, you can call
it spike low. And what this means is it’s the indication
of a trend reverse. So like in this example, when there’s a
down trend like this, after you see a spike low here, the trend might reverse to the upside. More precisely, when there’s a down trend
for a couple of days perviously, you know, it’s been lower low, higher low, but if
you look at this pin bar pointing downwards, it’s obvious that it’s way below from
this previous low, and also this low. It’s way below down here. And if you look at this candle, the body is
very tiny, you know, it’s just this much, but the wick is pointing down very long, right? So when you see a candle stick like this while
it’s on a down trend, that means it shows there’s a higher possibility that the trend
reverses to the upside after this day. This is one of the very important candles
to look for because when there’s a trend reverse, you can see this spike low very often. One of the examples would be when you look
at this chart, this is the Daily chart of GBPJPY and if you look at these, there are
wicks pointing downwards and the trend reversed to the upside after this. And remember what I said earlier? The spike low should be appeared when the
market is on a down trend. You should look for the spike low while the
market is on a down trend, not while it’s on the up trend. So for example, this one right here is not
the spike low, you see? If you only remember the pin bar and look
a this chart, and when you find this one right here, you might think it’s the signal of
the market keep moving up, and you might place buy here. I used to think like that, too when I was
a newbie, like as soon as I found a pin bar anywhere, I thought it’s a trend reverse
signal. But let me tell you, this one is not reliable
because it’s appearing while it’s on bullish momentum. So the lesson is, when you look for this spike
low, always look for it while the market is on down trend, not while it’s on up trend,
alright? So when you look at these spike lows and place
sell here, you will get all these pips and it’s going to be a lot of pips because this
is in Daily chart, like this first one, it’s like 350 pips to the top, so if you place
1 lot, then you’ll get like $3,500 of profit, right? So after you watch this video, please open
a chart and look for these candles with your on eyes, then you’ll get to realize a lot
of things by yourself. So now, I think you have an idea of what this
spike low is like. Alright, let’s move on to the next one. It’s the spike high. You may already have an idea what it’s like,
but this one is basically the other way around from the spike low. So this one also has the precondition. When you look for a spike high, always look
for it while the market is on a bull trend. And the wick should be clearly pointed up
higher than the previous highs. And it shows the strong signal for trend reverse
to the downside. So when you look at this chart example, there
was a up trend like this, you know, lower high, higher high, but suddenly, there’s
a candle stick with a long wick pointing upwards appeared on the market, and after it marked
the highest, the price came back all the way down to where it’s started, and created
a wick pointing upwards as a result. So as you can see, the highest here, the tip
of the wick on this candle is the highest from all the previous candles. So if you find this candle while the market
is on a bull trend, this is going to be an indication of the trend reverse to the downside. So if you have a buy position, you may take
profit, or close it with break even. Or, if you want to sell after this, you can
do so to get all these pips to the downside, alright? Le me share a real chart. This is an example in EURUSD in Daily chart. And last year in 2018, if you look at the
market right here, there was a wick pointing upwards with a tiny body, right? And this is the indication of a trend reverse
and in fact, the market dropped all the way down here until it showed another spike low
down here. So as you can see, the spike high especially
works while the market is on a bullish momentum. You know, I think you learn the best while
looking at the live chart, so try to look for these spike high and low or other patterns
like runway up and runway down from part 1 with your own eyes. Or, as you may know, I do the live streaming
every Tuesday and Friday, so you can join and watch the market realtime with me and
look for these price actions. And if you don’t understand fully on any
of these, make sure you look back the video and try to understand 100% because every step
you take along with my video will help you to become a professional trader because I
only introduce the techniques I use, and I became independent like this. So I’m sure you can be like me if you master
all these and apply yourself. And if you have any questions on anything
I’ve said earlier, please feel free to ask me anytime through email, or facebook, or
whatever, alright? because I’m here to help you and I really want you to be an independent
trader, and that’s why I keep uploading these videos. Alright, so let’s move on to the next price
action pattern. This is called Inside. And what this price action looks like is when
you see today’s candle is within the high and low of the previous candle, this pattern
is called inside. So when you look at this example on the left,
look at this candle stick. The high is here and the low is down here,
right? and if you look at the one before, the high was at this level and the low was
at this level. So you can see the current high and low are
all within the previous high and low and this is called inside, or in Japanese, it’s called
Harami candle pattern. And what this shows is the market is going
to be in a range. It shows that a consolidation is going to
happen. For example, if there was a bullish trend
before, if you look at this inside, then you can expect the trend will stop and the market
might be into a range. And how you can trade if you see this inside
is, when the price breaks out towards the direction of the major trend, then that shows
the trend continues. So when there was a bullish trend prior to
this inside, when it breaks this range upwards, most likely a bullish trend may continue. So after the breakout, for example you can
buy here at the push back and follow the major trend and take profit. If you are still a newbie, don’t think complicated. Just think to follow the trend after breakout,
and it’s ok for now. But the point is, when you see this inside,
then you better wait until the price breaks to either direction, because as you see on
this example, usually the market moves up and down with big volatility after the inside. So you may not be able to expect a big profit
under this condition, you know you will have a risk to get stop loss many times by these
wicks because the market gets volatile. So considering the efficiency in time and
money, I wouldn’t trade in this condition. But rather, waiting for the breakout while
looking at other pairs might be a wise decision. Here is another version of inside. The previous one was the inside while the
market is on bullish, but this one is while it’s on bearish, so basically it’s the
same thing. But when there’s an inside during the down
trend, it should be when the price of high and low today is within the previous high
and low. So when you look at this pin bar or Doji candle
right here, when you look at the previous high and low, the candle is all inside, right? And let’s say there’s a continuous bear
trend and you see this inside price action. Then you think to wait until the price breaks
the lower support line downwards, and you actually place sell here, right? After this, the price bounced up a little
bit, but eventually kept going down like this. So again, when you see the inside on the market,
expect that there will be a range, and the market may consolidate by itself. And talk to yourself, like “I won’t be
trading unless it breaks it downwards” alright? This is truly based on my trade experience,
and you will see lots and lots of market like this. So I’m sure you can also apply this on the
market. Moving on to the next one, it’s called Outside. And what this price action means is that it’s
when today’s candle is completely within the tomorrow’s high and low. So in this chart example, it’s here on this
blue one. As you see, the high and low of this blue
candle is completely within the high and low of next day’s candle stick. Inside was the other way around. Inside was when the previous candle covers
today’s candle, but the outside is when next day candle covers today’s candle stick. And when you see a pattern like this, most
likely it shows the continuous trend towards the breakout of the next day candle. So for example, when there’s a continuous
bull trend and when you find this outside, then it indicates the bullish trend may persist. And note that on this outside price action,
you can judge it today, I mean when this is a Daily chart. However, as for the inside, just by looking
at this candle stick on this day, you still don’t know if it’s going to be inside
or not until you see the next candle, you see? But as for this outside, you can tell it today
right? after today’s candle covers previous day’s high and low. For example, look at this chart. This is a H1 chart of AUDJPY and while the
market has been uptrend, if you look at a candle right here, you can see there’s a
clear outside bar, you see? this high and low are engulfing the previous high and low,
And after this, the price kept going up, so if you buy here, you can get all thees pips
later on. So this is an example of how you identify
the outside bar and apply it in a real chart. So again, open up a chart and look for where
you can find these 4 price actions, and make sure to check with your own eyes where they
appear on the market, so that you can apply to it by yourself. Alright, on the next video part 3, I will
be talking about some of a trade strategies on Pin Bars and how you can identify them
from multiple time frame charts so that you can increase your trade accuracy. So if you don’t want to miss the video,
make sure to subscribe and hit a bell so that you get an notification when it’s uploaded
next Monday. And also, if you liked today’s video, and
if you can press a good button, I will appreciate it very much. Alright, so I will see you on the next one. Stay Gold, Matane

6 Comments

  • Naisu

    November 7, 2019

    Good morning from San Diego, CA! I'm back to enjoy your content and learn with you 😀

    Reply
  • Maktanimate Tshiamo

    November 7, 2019

    Arigatou Mr Kei! Thank you very much

    Reply
  • RH Magz

    November 7, 2019

    Tnx sir kei.

    Reply
  • Abner Molinyawe

    November 7, 2019

    what timeframe do you use it master kei?

    Reply
  • Japanese Forex Trader Kei

    November 7, 2019

    The Pin Bar and Inside/Outside appear on the market often times. Get used to these patterns and be able to identify them for your winning trades. Stay Gold!

    Reply
  • Felino Co

    November 8, 2019

    Thanks for the video. On the AUDJPY outside example, what is the difference of it to bullish engulfing?

    Reply

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