Pin Bar Forex Trading Strategy – Pin Bar Definition
- The pin bar should have a long upper or lower tail…the tail is also sometimes called the “wick” or the “shadow”…they all mean the same thing. …
- The area between the open and close of the pin bar is called the “body” or “real body”. …
- The open and close of the pin bar should be very close together or equal (same price), the closer the better.
What is a pin bar in forex trading?
· The pin bar is a candlestick pattern that has a long tail up or down and represents the price rejection at support or resistance level in forex trading. The pin bar is the most powerful and effective candlestick pattern in technical analysis.
Why is it called a pin bar?
What is Pin Bar in Forex Trading? Pin Bar or Pinocchio Bar represents a single candlestick with a long wick that indicates future sharp reversal, rejection of price. Pin bar can be bullish or bearish.
What is a pin bar strategy?
To put it simply, a pin bar (or hammer candlestick as it’s often called in older trading literature) is price action pattern which is supposed to be a signal a reversal may be about to take place in the market. The reason I say supposed, is because not all …
What is the pin bar formation and how to trade it?
The Pin Bar is a price action reversal pattern and when it forms, it clearly shows that the price was rejected by the market at a certain price level or point. For A Bearish Pin Bar Formation: the very long tail tells you that the bulls took over and pushed the price a very long way up to form a high, but that high was not maintained.
What is a Pinbar in trading?
Pin bar and Inside bar Combo Patterns A pin bar is a price action strategy that shows rejection of price and indicates a potential reversal is imminent.
Is Pinbar bullish or bearish?
Because a pin bar is a single candle, when and if it forms against a trendline, it signals a continuation pattern, not a reversal. It comes to reinforce the bullish trend, and the market will shoot higher.
What does a bullish Pinbar mean?
A bullish Pinbar shows rejection of lower prices. The lower wick shows the bears were in control earlier but was eventually overcome by the bulls. A bearish Pinbar shows rejection of higher prices. The upper wick shows the bulls were in control earlier but was eventually overcome by the bears.
Can a bullish Pinbar be red?
It doesn’t matter what the colour of the bar is. If you have a bullish pin bar reversal as a seller (red) bar, then it is still bullish as a price pattern.
How do you trade inside a bar?
The following steps are used when identifying the inside bar pattern on forex charts:Identify a preceding trend using price action/technical indicators.Locate inside bar pattern whereby the inside bar is engulfed fully by the preceding candle high and low.
Which candlestick pattern is bullish?
The Bullish Morning Star is a three-candlestick pattern. It signals a major bottom reversal. In this pattern, a black candlestick is followed by a short candlestick, which usually gaps down to form a Star. The third white candlestick’s closing is well into the first session’s black body.
What is a bullish doji?
A bullish star doji, also referred to as a morning star doji, occurs after a decline and looks like a plus sign. If the price moves higher after the bullish start doji, this helps to confirm the pattern. It is a “star” because its body must be below the prior candle’s body.
What is an inside candle?
Inside days refer to a candlestick pattern that forms after a security has experienced daily price ranges within the previous day’s high-low range. That is, the price of the security has traded “inside” the upper and lower bounds of the previous trading session.
What does dragonfly doji mean?
A Dragonfly Doji is a type of candlestick pattern that can signal a potential reversal in price to the downside or upside, depending on past price action. It’s formed when the asset’s high, open, and close prices are the same.
Is Hammer and Pinbar same?
they are the same thing. Pin bar is a more modern term and old literature on candlesticks will call them hammers.
What is bullish Harami?
A bullish harami is a candlestick chart indicator used for spotting reversals in a bear trend. It is generally indicated by a small increase in price (signified by a white candle) that can be contained within the given equity’s downward price movement (signified by black candles) from the past couple of days.
What is gravestone doji pattern?
A gravestone doji is a bearish pattern that suggests a reversal followed by a downtrend in the price action. A gravestone pattern can be used as a sign to take profits on a bullish position or enter a bearish trade. The opposite of a gravestone doji is a dragonfly doji.
What is a pin bar candlestick?
Pin bar candle consists of a small body and a long tail wick. Long-tail up indicates price rejection from a certain resistance level. Long-tail down in pin bar confirms price rejection from a support level. There is also a small shadow below the bearish candlestick and above the bullish candlestick.
Bullish pin bar
A type of pin bar candlestick in which long-tail wick is below the body of the candlestick is called bullish pin bar. The bullish pin bar indicates the reversal of the bearish trend. A good pin bar forms at the end of the bearish trend (oversold condition) and shows a clear price rejection from a specific support level.
Bearish pin bar candlestick
A type of pin bar candlestick in which the long tail is above the body of the candlestick is called a bearish pin bar.
Psychology of pin bar in forex
To trade a pattern logically, it is essential to know the reason for a reversal in the trend due to the pin bar pattern. let’s suppose, price is in a bullish trend (higher highs and higher lows). Now price reaches a certain resistance level where sellers are waiting to trigger sell orders with stop losses just above the resistance zone.
Difference between doji and pin bar candlestricks
pin bar candlestick always has the body (round about 25%) at the bottom or top. but a Doji candle does not have the body. Doji candlestick has the same opening and closing price.
Conclusion
Pin bar pattern shows the market maker’s footprints. if it is used properly, you will be able to profit from the forex market easily. When you will backtest this pattern at least 100 times, then you can pick the best patterns from the chart easily. The opening and closing price of a pattern is very important.
What is a pin bar?
The actual pin bar itself is a bar with a long upper or lower “tail”, “wick” or “shadow” and a much smaller “body” or “real body”, you can find pin bars on any stripped-down, “naked” bar chart or candlestick chart. We use candlestick charts because they show the price action the clearest and are the most popular charts amongst professional traders.
What is the pin bar called?
• The pin bar should have a long upper or lower tail…the tail is also sometimes called the “wick” or the “shadow”…they all mean the same thing. It’s the “pointy” part of the pin bar that literally looks like a “tail” and that shows rejection or false break of a level.
Why does the pin bar point down in a bullish reversal?
In a bullish pin bar reversal setup, the pin bar’s tail points down because it shows rejection of lower prices or a level of support. This setup very often leads to a rise in price.
Why does the pin bar tail point up?
In a bearish pin bar reversal setup, the pin bar’s tail points up because it shows rejection of higher prices or a level of resistance. This setup very often leads to a drop in price.
How accurate are pin bars?
Next, try to only take take pin bars that are displaying confluence with another factor. Generally, pin bars taken with the dominant daily chart trend are the most accurate. However, there are many profitable pin bars that often occur in range-bound markets or at major market turning points as well.
Why do we use candlestick charts?
We use candlestick charts because they show the price action the clearest and are the most popular charts amongst professional traders. Many traders prefer the candlestick version over standard bar charts because it is generally regarded as a better visual representation of price action.
What is Pin Bar in Forex Trading?
Pin Bar or Pinocchio Bar represents a single candlestick with a long wick that indicates future sharp reversal, rejection of price. Pin bar can be bullish or bearish.
What is a bullish pin bar?
A bullish pin bar is one candle pattern with a longer down the wick and represents a sharp reversal, rejection of price, and usually indicates a future rising trend. The image below is an example of a bullish pin bar reversal candlestick:
What is a bearish pin bar?
A bearish pin bar is one candle pattern with a long upper wick representing a sharp reversal, rejection of price and usually indicates a future downtrend. The image below is an example of a bearish pin bar reversal candlestick:
How to identify the Pin Bar on the chart?
A Pin Bar usually looks like a wick or a wand with a long tail and a shorter body. Because of its shape, it is also known as a ‘wick’ or a ‘shadow.’
Download free Pin Bar Detector Indicator
Below you can download the pin bar detector indicator. This indicator will mark bullish and bearish pin bar candlesticks.
Trading with the Pin Bars
While trading with Pin Bars, traders should keep in mind some important notes to get a better result. First, one must not just look at a pattern with a wick and call it a Pin Bar. It has its own characteristics that can ensure a strong reversal in the price trend. Otherwise, traders can misjudge such patterns.
Pin Bar Support and Resistance
To counter-trend or, in simple words, go against the ongoing trend or what the Pin Bar suggests, key chart levels of resistance and support are beneficial. Resistance and support levels basically represent strong selling and buying opportunities, respectively.
What is the tail of a pin bar?
The pin bar reversal as it is sometimes called, is defined by a long tail, the tail is also referred to as a “shadow” or “wick”. The area between the open and close of the pin bar is called its “real body”, and pin bars generally have small real bodies in comparison to their long tails. The tail of the pin bar shows the area …
What is a pin bar pattern?
A pin bar pattern consists of one price bar, typically a candlestick price bar, which represents a sharp reversal and rejection of price. The pin bar reversal as it is sometimes called, is defined by a long tail, the tail is also referred to as a “shadow” or “wick”. The area between the open and close of the pin bar is called its “real body”, …
What is a pin bar signal?
A pin bar entry signal, in a trending market, can offer a very high-probability entry and a good risk to reward scenario. In the example below, we can see a bullish pin bar signal that formed in the context of an up-trending market.
What is a pin bar?
To put it simply, a pin bar (or hammer candlestick as it’s often called in older trading literature) is price action pattern which is supposed to be a signal a reversal may be about to take place in the market. The reason I say supposed, is because not all pin bars are sign the market might be about to reverse.
What is the difference between bullish and bearish pin bars?
As you can see, bullish pin bars look very similar to bearish pin bars, the only real difference between the two is the body of the bullish pin bar is found at the top of the candle instead of the bottom , and most of the wick is found at the bottom instead of the top . Similar to the previous image the body of this bullish pin bar does not manage …
How to measure the distance between a low and high candle?
To actually measure how far away the low of the candle is from the high, you need to select the crosshair tool in MT4 and click and drag the crosshair up from the low of the candle to the high. The distance will then be displayed as a three or four digit number next to the crosshair.
What is pin bar?
The Pin Bar is a price action reversal pattern and when it forms, it clearly shows that the price was rejected by the market at a certain price level or point.
What is pin bar candle?
The pin bar, is one of the most high probability reversal candlestick patterns you can have but there’s a catch: not all pin bars are created equal. The most important thing about pin bars is where (the location) they form on the chart. [sociallocker]
What is bullish pin bar?
a bullish pin bar formation is the exact opposite of the bearish pin bar formation: the long tail tells you that initially, the bears took control of the market and pushed the price all the way down to make a low but this low was not sustained.
What does the very long tail mean?
the very long tail tells you that the bulls took over and pushed the price a very long way up to form a high, but that high was not maintained. The bears came with such a great force and took over and pushed price down all the way, wiping away all the price gains made by the bulls.
What is a trading edge?
A trading edge is something common to all profitable trading strategies ( day trading, swing trading…). It is a price action signal or some other occurrence in the forex market that results in a tradable opportunity that can be repeated over time.
The pin-bar forex pattern
The trading strategy we are about to present is a simple yet proven profitable forex strategy.
Using a pin-bar pattern in a profitable forex strategy
As you can image, something like the above image of a pin bar occurs quite frequently in forex markets and most of the time the pattern does not offer a tradeable opportunity that gives the trader an edge over time.
Profitable trading strategy setup
The combination of a trend trading strategy, a known area of support like a Fibonacci retracement level and a short-term price action reversal pattern like the pin-bar make for a reliable edge in the market.
Known issues with the trading strategy
There are different issues to practice and overcome. The main one of which is to only take the highest probability setups. Afterall this is a discretionary trading system and takes time for traders to get familiar with.
Can you trade pin bars in forex?
Pin Bar Fact: Pin bars can be traded successfully in both trending and range-bound market conditions. This fact makes it one of the most versatile Forex trading strategies out there. Now that you know some solid facts about Forex pin bar trading you can try trading them on a demo account.
What is pin bar?
Pin bars are one of the most popular of my price action trading strategies. They show a clear rejection of a price level and are often followed by a large directional move opposite the direction of the rejection.
What Pin Bars Look Like
Some people try to get all crazy and define a Pin Bar with a super strict, complicated formula. The wick has to be twice the length of the body, there cannot be a wick on the other side…blah, blah, blah.
How They Can be Traded
But keep in mind that it is just that…a clue. You have to take a look at the bigger picture and figure out how this Pin Bar fits into other price levels on the chart.
Pin Bar Exercise
Now it’s your turn. Go through your charts and find some examples of Pin Bars that worked out.
More Indicators and Chart Patterns Explained
Hi, I’m Hugh. I’m an independent trader, educator and international speaker. I help traders develop their trading psychology and trading strategies. Learn more about me here.
