Price Action PATTERN # 6: Pin Bars

Pin Bar Fact#1:

A Pin Bar is “NOT” a doji candlestick or a hanging man candlestick.

A pin bar is a  very unique candlestick because it shows rejection of a price level via very long tail or spike and this tail or spike is much larger/longer than the entire candlestick body.

Not all pin bars are created equal. The location of where the pin bar forms is very important. Just because you see a pin bar form on the chart doesn’t mean its a good pin bar that you can trade.

Pin Bar Fact#2:

If you want to trade the pin bar, you trade in the opposite direction of the tail.

For a bullish pin bar, the tail will be pointing down, then you buy.

For a bearish pin bar, the tail will be pointing up, then you sell the tail is pointing up then you sell.

Pin Bar Fact#3:

The probability of success in trading pin bars is higher in larger time frames like the 4hr and daily.

Pin Bar Fact#4:

I mentioned previously that not all pin bars are created equal. If pin bars form in areas of confluence,  then you should take notice of such because the chances of taking trades that go successful are good.

You should also look at trading pin bars that form at swing lows in an uptrend

The opposite is also true, look for pin bars in swing highs in a downtrend and if a pin bar forms, take a short trade.

Ideally, if you see a pin bar make a“false-break”  or rejection of a key price level then that’s a very good signal to trade.

Pin Bar Fact#5:

You can also watch exponential moving averages for pin bar trading setups. The EMAs that you can use are:

• the 8 and 21 period EMAs
• the 9 and 18 period EMAs
• the 7 and 14 perioud EMAs

Pin Bar Fact #5:

Did you know that Pin bars can be traded successfully in both range bound and trending market conditions? Guess what?  This fact alone makes trading pin bars one of the most versatile forex systems out there.

HOW TO TRADING PIN BAR

For those trades that may find it hard to understand, this is generally how you trade pin bar trading setups: