The Pin Bar Candlestick Trading Guide

The Pin Bar Candlestick Trading Guide

The Pin Bar Candlestick Trading Guide

In other words, we didn’t have the necessary confluence to consider this a worthy pin bar to trade. Notice the pin bar just in front of the one I’ve identified in the chart above, the one that’s facing the other direction. The body should also be close to the end of the pin bar. Forex Pops Provide Free MT4 indicators and tools for help all beginners. Place your stop loss order at a level that is below the low of the pin bar.

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There are many oscillator indicators available to traders, including stochastic, RSI, CCI, OsMA, Williams %R, and others. Oscillators are one of the best indicators for trading a ranging market. The first thing you need to identify when trading a ranging market is the boundaries of the range. Another option is to place a limit order around the middle of the pin bar’s tail.

You’re just sitting on your hands all the time, with not much trading opportunities. And the third candle price closed lower all the way down. You can see over here, price rallied up higher, then it closed lower with a wick showing some buying pressure. In an uptrend, the price comes back to an area of support.

The signal from an oscillator often involves the indicator coming out from the overbought region or the oversold region . The price is likely to reverse when it hits these zones, but from time to time, it does overshoot the boundaries and gets sharply rejected. A ranging market is a market that moves sideways, without making any significant displacement to the upside or downside. You must have a way of identifying other confluence factors that can increase the odds of a successful outcome.

The Pinbar Trading Strategy Guide

During a wedge formation, the price action is confusing, to say the least. The market continues making higher highs and higher lows or lower lows and lower highs but without meaningful conviction. Many of the patterns took the Western world entirely by surprise.


What set up do you typically find the most profitable – the pin bar, inside bar or the fakey? You enter half way through a pin bar at the next candle, right? I suppose entering half way would enable smaller stops. Every new fx trader must not afford to miss reading price action guide before delving into trading. It must have a wick that is at least two-thirds of the candlestick’s range. So the body of the candlestick must be relatively small compared to the overall size of the pattern.

How to Draw Trend Lines Perfectly Every Time

Filled with numerous price struggles, it was a significant market zone. Hence, we should pay attention to any breakout or failed breakout from this zone. And the Pin Bar here was a failed upside breakout of this zone. The Pin Bar was also a bearish outside bar that signaled the strength of the rejection. The upper shadow of a bearish Pin Bar is at least two-thirds of the bar range.

Given the right context, the Pin Bar offers a reliable point of entry. This point was the end of the trend’s first deep pullback. It was a reasonable candidate to anchor a swing for projecting a 50% retracement zone. In this 4-hour chart of the USDJPY currency pair, we are using a 200-period SMA to gauge the market’s long term bias.

  • On the setup above a pin bar with a large range forms and rejects lows of the day.
  • If somebody was willing to buy very aggressively, the wick’s range, especially the tip, becomes significant.
  • I find that they help to quickly identify the trend and also act as dynamic support and resistance.
  • The conflict or the battle between bulls and bears implies the market won’t reverse quickly.

Because it is a confluence area, the pin bar trading strategy explained earlier won’t work most of the times. The rejection is abrupt and powerful so the pullback into the Fibonacci area won’t come. When a pin bar forms as part of a different pattern, the market signals a strong reversal potential. There are a lot of valuable strategies that require the knowledge of candlestick patterns and oscillators. When you start trading with them, you can face situations when the strategy is not moving your way. This is a good example of how powerful price action trading really is.

Review – Pinocchio Bar Trade Setup (Pin Bar)

He has a monthly readership of 250,000+ traders and has taught over 25,000+ students since 2008. Technical analysis today differs significantly from the old days. The early 1900’s saw most of the trading theories trying to understand crowds’ behaviour. Go to the Withdrawal page on the website or the Finances section of the FBS Personal Area and access Withdrawal.

rejection candles

Nial Fuller is a professional trader, author & coach who is considered ‘The Authority’ on Price Action Trading. He has taught over 25,000 students via his Price Action Trading Course since 2008. In 2016, Nial won the Million Dollar Trader Competition. This is because if the tail is at least 2/3 of the entire bar and the body is small, then the nose should also be relatively small. Three-Bar Inside Bar Pattern – another interesting bar pattern to use in your trading.

Final notes about Pin Bar

The most effective pin bar trading bars occur at key support or resistance levels. A pin bar is a type of candlestick pattern that suggests strong buying or selling pressure because of the long upper or lower wick, also called a shadow or tail. The usual approach for breakout trading is to place entry orders and stop orders at support and resistance levels. Depending on the place of formation and its shape, the pin bar candlestick could be used as both a reversal, as well as continuation pattern.


Derivatives enable you to trade rising as well as declining prices. So, depending on what you think will happen with the asset’s price when one of the Pin Bar appears, you can open a long position or a short position. The open and close of the pin bar are near one end of the bar, the closer to the end the better. The open and close of the pin bar should be very close together or equal , the closer the better. He is the most followed trader in Singapore with more than 100,000 traders reading his blog every month… How do we know which stock is going to form pinbar, how to sort the stock for the next day for pinbar strategy.

While the pin bar represents a volatile push in either direction, the inside bar represents consolidation after a large move. These two strategies have a common thread – they are both the byproduct of news. Whether it be something that was just announced or a more gradual flow of news that causes market sentiment to either fluctuate or remain constant. Must be above the current market price, including the spread.

What is the Pin Bar Candlestick Chart Pattern?

The Fibonacci retracement levels indicate the percentage of the preceding impulse wave which the corrective wave can retrace to. In other words, wait for a pullback to a support level and watch out for a bullish pin bar. A bearish pin bar is one that has its tail above the body and a small or no wick at the lower end. The real body is small and located near the lower end and can be of any color. A pin bar is a candlestick with a long upper or lower wick , a small or no real body, and little or no wick on the other end. There are many different descriptions of pin bar trading strategies out there, but you can’t make a penny with most of them. bars occur in all market conditions; up trends, down trends, and range bound. The beauty of price action analysis is that it teaches you how to analyze market movement based on inherently generated data; namely price data. Reversal bars taken at confluent levels can act as a map to long-term profits in the forex market. Trader’s can design a highly profitable trading method entirely around pin bars if they so desire. The more confluence added to a pin bar formation the more accurate it becomes.

As a result, we have no reason to believe our customers perform better or worse than traders as a whole. Successful trading strategies are profitable because they are repeatable, whereas random patterns are not. On the setup above a pin bar with a large range forms and rejects lows of the day.

  • Sometimes it’s non-existent if the open or close occurs at the extreme end of the pin bar.
  • You can see the two phases of price movements which are responsible for printing the pin bar on the chart.
  • But you have to understand what these patterns are telling you.
  • The analogy of Pinocchio tied in perfectly with Martin’s observations, because a pin bar is broken down into 2 moves.
  • Unlock our free video lessons and you will learn the exact chart patterns you need to know to find opportunities in the markets.

Rejection Candles produce excellent returns for price action trader, tip us off to moves before they happen and give us the framework to build a logical trade position from. So, looking for pin bars alone will lead to missing so many trading opportunities. It’s better to understand what the price action is saying in each market context.

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If you see strong momentum followed by a small bearish Pinbar, it’s likely to be a pause . Get ready to receive three amazing chart pattern videos that are over 30 minutes long straight into your inbox. We use the information you provide to contact you about your membership with us and to provide you with relevant content. Make sure the candle’s body is small and has a long wick.