Trading Strategies Revealed – “Inside Bar + Pin Bar” review

Trend reversal trading strategy “Inside Bar + Pin Bar” is designed mainly for Forex and can be used on all currency pairs on any time frames. Its rules state that:

A trader should place a buy stop order at a high of the signal candle upon an “Inside Bar + Pin Bar Combo” pattern during a downtrend. A sell stop should be placed at a low of the signal candle upon “Inside Bar + Pin Bar Combo” pattern during an uptrend. The stop loss should be placed at the high/low of the signal candle with 1:2 Risk-to-Reward ratio. To define the trend we have used a combination of Fractals indicator and 3 EMAs with 10, 25 and 50 periods.
For more information please refer to https://priceaction.com/price-action-university/strategies/pin-bar-inside-bar-combo/.

For our test, we have used a Trailing Stop which is launched after a trade has started and is modified each new 1 pip of profit. From our point of view, such approach allows to maximize profit and minimize drawdown. We have run the test for 2010.01.01-2019.05.22 using Control Points modelling on EURUSD-H1, with no leverage, without reinvestment, assuming spread equals 10 ticks, with starting balance 10000. These are the main parameters of financial performance, that may allow you to evaluate whether this strategy worth your attention or not:

ROI# of tradesWinning ratioMax. drawdown
-10.44%62933.86%10.49%

The following charts may give some possible insights on which filters to apply (time sessions, day of week limitation, trend strength threshold, overbought/oversold conditions, volatility range) to turn this strategy profitable should you decide to use this strategy in your investment portfolio:


Analysis Insights



1. Our analysis of popular trading strategy “Inside Bar + Pin Bar” during 2010-2019 has shown that it is unprofitable on most of major currency FX pairs, such as EURUSD, EURGBP, EURJPY, GBPUSD, GBPJPY.



If you decide to buy an EA, coded in accordance with the strategy and used for the test, or to make any amendments to the original strategy rules – please, feel free to contact us.

Our company specializes on automated trading systems and trading indicators development for the most popular trading platforms, such as MetaTrader 4/5, NinjaTrader 7/8 and cTrader.

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RISK DISCLOSURE

Trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

Hypothetical or Simulated performance results have certain limitations, unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.

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