Interesting setup on the USDCHF - 1HR chart

I was checking the charts, testing for confluence, and found this interesting setup on the USDCHF.

(you'll probably have to click on the image to see it more clearly)

This was a very good example of a high probability price action setup.

Pinbar backtest - 40% complete

I'm currently backtesting a mechanical system based on pinbars, but with my own modifications. Profit factor is hovering between 1.15 and 1.3 at the moment. I've only gathered 400 trades from four pairs so far (GBPUSD, EURUSD, AUDUSD, USDCHF) between 2001 and 2012. The goal is to gather 1,000 samples. What's making this system real juicy is the frequency of trades. If I trade the top 8 liquid pairs, the results suggest a frequency of 6-8 trades per week.

10th April 2012 - loss on EURJPY

A pin bar formed on the EURJPY overnight at a support level. I placed a pending long which was triggered, then ended in a loss. The pin bar is visually presented below.

Details of the order zoomed in...

I looked at any possible news releases that would explain the downturn but couldn't find anything of real importance. I guess this is one of those statistical trades destined to fail. A factor that could've went against my trade was the strong bearish momentum before the pinbar, where three consecutive bear candles exist. However, the pin bar itself was quite prominent and closed with a bullish tone. I don't really see anything screaming out not to take this trade.

Tightening my SL to the 25% mark of the pinbar helped improve R:R once again.

18th March 2012 - weekend setups

Two possible setups have presented themselves over the weekend.

Silver

I think this is a good quality setup. An inside bar formed on Friday's close. This looks like a good opportunity to short silver.

In favour:

+ around resistance
+ suitable R:R to next support level
+ with the trend (bearish)
+ similar signal in gold
+ break of inside bar's bottom clears resistance/support

Against:

- inside bar is not at an extreme end of the previous bar

GBPAUD

This setup is quite messy. An inside bar has similarly formed on Friday's close.

The current resistance level isn't well defined, so I've decided to use a zone instead. Going long here looks a little problematic as breaking the top of the inside bar will not put price beyond the resistance zone, increasing the likelihood of a fake-out.

In favour of a long:

+ with the trend
+ suitable R:R to next resistance level

Against a long:

- not an extreme end of previous bar
- break of inside bar's top will not clear resistance zone
- will be trading into 1.5000 (psychological benchmark)

In favour of a short:

+ suitable R:R to next support level
+ break of inside's bar bottom clears current resistance/support
+ trading away from 1.5000

Against a short:

- moving into "de-virginised" space on chart
- against the trend

This isn't a clean setup. Direction can move either way so I'll skip this one on Monday morning.

Trading journal and income & savings projection

I spent tonight creating a trading journal for the last few months. My average return per trade is 48% so far. The sample size is very small, only 13 trades. Link is on the right.

I've also created a basic income and savings projection. I expect to retire by the age of 40 on an annual income of $75k, adjusted for inflation.