This forex trading technique is powerful as it allows you to non farm payroll and forex news no matter which way the market is going. The following pivot point trading strategy has been around for a long time.
The reason pivot points are so popular is that they are predictive as opposed to lagging. The Commitment of Traders strategy is based on a weekly report where large institutional traders have to disclose their long and short positions. It is useful as it helps you determine when a market reversal is looming. The formation of a pin bar is actually a trend reversal featuring 3 bars.
The term “Pin Bar” is an abbreviation of the term “Pinocchio Bar”. False breaks are an indication of what institutional traders are doing: hunting the stop loss levels of small retail taders to get them out of their positions and create a price “vacuum” to reverse the market’s trend. This strategy is a basic scalping strategy that aims to make quick gains off of the day’s high or low. The rules for entry are very basic and easy to follow.