This trade didn't quite work out. I saw a pinbar on what looked like a retracement of the overall bullish trend. I checked with more-experienced traders and all agreed that this was the perfect setup for a sucker rally. Being me, I had to see for myself if this trade would work, and entered long on the break of the pinbar. Price rallied for a short while before reversing and hitting my SL late yesterday. Thankfully I was in demo mode so didn't lose any real money. I think I will stay in demo mode until I am consistently profitable for six months. I need to be serious and treat this as a business, not a hobby.
From what other traders told me, this pinbar:
- closed too weak (bearish body was too big)
- nose of pinbar wasn't long enough
- overall, the pinbar wasn't convincing enough to suggest a continuation of the uptrend.
I'm not so sure about the reasons above. The pinbar formed at an obvious support level in favour of the 21 SMA. I'm currently backtesting entry on trend retracements and will post examples in my next post.