PINOCCHIO BAR (PIN BAR)
What does it look like?
It resembles the nose of Pinocchio. It has a long and distinct tail.
For bullish pin bars, the lower tail takes up most of the bar. For bearish pin bars, it is the upper tail that dominates.
What does it mean?
Paraphrasing Martin Pring, the pin bar lies like Pinocchio.
With its long tail, a pin bar breaks a support or resistance momentarily to trick traders into entering the wrong direction. These traders are trapped, and there is often money to be made when you find trapped traders.
How do we trade it?
- Buy above a bullish pin bar that is rejected from support level
- Sell below a bearish pin bar that is rejected from a resistance level
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