
Pin Bar Trading Strategy
Daily Forex Signals – Sometimes a chart or a candlestick pattern may provide a decent entry signal if it is located at a certain level. A pin bar is one of the most reliable and famous candlestick patterns, and when traders see it on the chart, they expect the price to change its direction soon. If you understand how to recognize this pattern and use it in trading strategies, it will serve as an excellent instrument for making reasonable decisions.
Charting Basics – Bars vs. Candlesticks
What is a pin bar?
A pin bar is a type of candlestick that signals the reversal of prices. It consists of a long shadow, a small shadow, and a body between them. Fun fact: this pattern’s name is short for Pinocchio, as it has a long wick similar to Pinocchio’s nose.
However, besides a long shadow, there are also special market conditions to call a candlestick pattern a pin bar.
Pin Bar Trading Strategy
Pin Bar Trading Strategy
The chart above shows that EURUSD tried to spike higher after it reached a local trend line on the M15 chart. However, bulls could not hold the positions for a long time. As a result, the pin bar was formed. After confirming it, we placed a sell order below the low of the pin bar at 1.03497 and a Stop Loss above the recent resistance line at 1.03598. We put a Take Profit level at 1.03194. As a result, we earned 302 points.
Rules for a long entry
Mark the key levels and identify trend lines.
When a pin bar is formed at the important support level, place a “Buy” order 10-20 points above the high of the pin bar.
Place a Stop Loss 20-30 points below the support line that caused the rejection of prices.
Place a Take Profit when the price gets twice or three times bigger than your risk for this trade or exit at the significant resistance level.
Pin Bar Trading Strategy: Everything You Need to Be Profitable
Pin Bar Trading Strategy
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