Pin bars are a type of single candle candlestick patterns, which when appearing on the candlestick charts, offers distinctive clues into the Price Action
- The actual pin bar is a bar with a long upper or lower wick. It mainly appears at the end of trends
- The best pin-bar strategies occur with a confluence of signals such as support and resistance levels.
- They work on all time frames but more powerful on the 1hour 4 hours and daily chart time frames
- They should have a long upper or lower tail. The tail shows rejection or false break of a level.
- The shadow or tail of the pin-bar sticks out (protrudes) from the surrounding price bars. The longer the tail of the pin-bar the better
- The wick must be three times as big as the body
- The body must be on one end of the wick not in the middle
How to trade the pin-bar formation
- Analyze whether the markets are ranging or trending. The main reason is that trending pairs offer more opportunities, but you can also get some great entry points on ranging markets.
Ranging markets entry points
Market entry points
- Direct market execution- this means you place a market order which gets filled immediately after you place it at the best price. A bullish pin bar would get a buy market order and a bearish pin a sell market order.
Placing stop loss orders
- You can buy or sell where the body of the pin-bar starts and set your stop loss at the tip of the wick
Support and resistance
- By trading with support and resistance, you greatly enhance your chances of a successful trade, because you are reading what the market is giving you.