hello everyone welcome to this short
educational video of alpha trade zone in
this video I'm going to explain a rather
simple but very effective trading
strategy it's called the pinbar trading
strategy let me just first explain what
is a pinbar candle so there's two types
of pinbar candles there is a bullish pin
bar and a bearish pinbar the candles
basically they consist of a very long
wick the bullish candle the bullish pin
bar candle it has a very long wick below
the candle body and it could probably
also have a small wick above the candle
body the bearish pinbar can do is vice
versa it has a small body at the bottom
of the candle
with the possibility to have a small
wick even below the kind of body and a
large wick above it. we are generally
looking for bullish pin bar candles at
the bottom at the end of a local
downtrend or for bearish pinbar candles
at the top of a local  uptrend, so that
we can determine the reversal levels.
There's also the possibility of those
candles to have a bit larger bodies,
but in order to include such a
candlestick in our strategy we need to
have a very strong confluence with our
levels as well. Generally the rule is
that we are looking for the wicks, for
the large wicks to be at least three to
four times the size of the candles
bodies.
So how would we define on entry and an
exit on a trading setup, based on this
candle strategy? Let's just go to the BTC
chart over there, there is an example I
have picked up for you which happened
yesterday and it was a very clear
example of how this strategy is working.
We did this live as a trade on our
premium group and just because it was a
very interesting example I decided to
show it to you guys on how to frame your
trading setups very easy in a very easy
and effective way. What we had yesterday
was, we had this hourly candle at the end
of a local downtrend and basically just
before we enter a trade we want to have
a confluence between a few other levels.
We don't only look for this single pin
bar candle but we also want it to have a
confluence with another level like
fibonacci support or resistance level or
a local support or resistance level. So in our case what we have is this
local liquidity level that was broken
over here, that was broken over here. Let
me just frame it on the chart so we have
this
so that pin bar can do is actually
broken over here and closed below the
swing low over here what else do we
have we have horizontal support right
here around those candles. So the candle
is closing above this support and what
else do we have there is a triple
confluence because let me show you guys
that's a Fibonacci retracement tool from
the from the bottom to the top and
actually the 50% Fibonacci retracement
is also around this candle body so in
this situation we have a triple
confluence and this leads us to believe
that this candle has the high
probability to form a set up that has
high chance to play out how do we frame
an entry when we spot such a setup the
best way to refine an entry of course
when we spot a set up on our given time
frame is to go to a lower time frame and
see if we can get a better entry so in
our example we have the one hour chart
we are so going to switch a bit lower to
the fifteen minutes time frame so what
do we have from the fifteen minutes time
frame we have amazingly are very similar
setup right here
we are going to look at that candle it
is actually the same key no it's a pin
bar candle that is formed around the
critical support level. So this candle
body has closed above the swing low this
is also forming a swing failure pattern
so we are going to frame a trading setup
that is based on entering around this
candle so what choices do we have for
entry of course the first choice to
frame an entry is to enter a trade
immediately after this candle has closed
so that's going to be our entry and the
second possible entry option is to enter
add around the 50% retracement level
from the bottom of the wick to the top
of the wick of the last pinbar candle
which in our case would mean that we
should be positioning our entries at
around 6641, because what I have observed is that
pretty often the the price tends to
after this after the candle has closed
the price tends to retrace to fifty
percent of the size of the previous
candle and then jump back up to the
chart so the optimal entry for our
setups would be to enter fifty percent
over here if we don't have time to later
we don't want to wait for this or to
miss out the price action going to the
upside and place second entry order at
the 50% retracement of the candle this
would give us better risk to reward
entry when entering the trade by
lowering our average entry price so one
of the first things to ask before we
enter a trade of course is where am I
wrong? And in this kind of setups the
invalidation level is usually a little
bit or right after the bottom of the
candles of the candlestick wick. So this
would frame our setup like this we enter
it 50% and invalidation is around
in our case just a little bit below it
is around 6600 and
six dollars so once we have entered the
trade we need we have estimated our risk
and we need to define our target zone.
Usually in such setups the target zones
for the setup will be the first trouble
area or the first supply zone on the
timeframe that we are entering the trade
as we notice over here we have this
resistance level that has produced
reactions in the past which is right
about here on those wicks and it can
sides with that little supplies on that
I'm about to mark on the chart. Supply
zone is a last bullish candle before a
big move down so it's going to look like
this on the chart. Let me just fix the
setup right here so that's the supply
zone and supply zone right here and we
have this as a target this actually
provides us with a setup that has close
to five risk to reward ratio which is a
pretty good
Risk to reward ratio if we if we want
to play this setup it should look like
this. So when we have framed this setup
let's just see how the price responds. It
basically hits it basically hits the
target zone right away, without any
retracement to the 50% of the candle
body which means that in our case we
would have gotten if we enter right if
we enter right after the candlestick
closes we would still have gotten 50% of
our setups so we notice that the price
is hitting our target level and after
that it's retracing back to
to our entry point. Similar setups of
course they look on the bullish side but
similar setups also we may be taking on
the bearish side as pinbar candles they
also tend to form around reversal levels
at the end of a local uptrend a similar
setup we should be looking of course at
the price chart so that we can find a
similar setup in our case I will be
trying to find one on the chart where it
will illustrate a similar it will
illustrate a similar chart and here it
is at the end of this local uptrend we
notice we notice right here let me just
start the replay Start the replay over so
that we can move over there and see how
this played out since we we spotted this
candle and at a local top of an uptrend
so
we start right here so the proper entry
would be after the end after this candle
has closed we withdraw the Fibonacci
retracement so our entry is right here
at six eight three one and another entry
around the candlestick 50% retracement
around six eight six eight and let's
frame the setup short position the
average entry should be around here
with invalidation slightly above the
end of the wick so where would be our
first target zone it would be right here
right at the first consolidation area
and demand zone over here we also have a
supply and of course a second target
profit would be right here at the top of
this wick because that's that's a
probable bounce
area so let's just see how it's going to
play out the next candle if you look
right here this candle retrace right at
a 50% retracement of this pinbar 
candle at the top at the top of the
uptrend and what has happened with right
after that right on the next candle we
have actually reached our first target
where we're taking profits and just so
that we are convinced that we are taking
a proper setup we should be looking at
the risk to reward ratio on our setups
to be at least two which means that we
are risking 1% of our capital to win 2%
and that's the minimum
popular requirement for a correct
trading setup to be framed on this
strategy is fairly easy to apply if you
just follow those simple rules
it can be applied to any asset not only
to BTC but on any out coin or or any
just any financial instrument if you
back test this strategy it has fairly
good chance to play out so practice it
first try for yourself and you will just
see how easy it is to frame trade space
on this very easy strategy to apply
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