Pin Bar Candlestick
In this article
What about the pin bar candlestick everyone is talking about? At the moment of their entry, several potential signals are available to traders.
The price action offers several settings that bring a favourable return between risk and reward and are easy to implement.
The pin bar is one of the most famous formations that you can use in different market contexts. This article will look in complete detail at what a pin candlestick is and how to use it. Let’s go!
What does a pin bar candlestick mean?
The pin bar candle consists of a small body and a long tip. A high tail indicates a price level resistance rejection. The high end of the pin bar confirms the rejection of the price level of support.
There is also a slight shadow under the bear candlestick and above the bull candlestick. There are two conditions for determining a valid pin-bar plug, which are:
- The body of the candle should be less than 20% of the total size of the candle
- The tailor tip of the candle should be more than 80%
Characteristics of pin bar candlestick pattern
The pin candle should have the following properties:
- Tail (also known as wick or shadow): Pin Bar is a candle with a high or low tail. This is the peak of Pin Bar, which shows a sharp drop in prices. The Pin Bar’s tail should be at least 2/3 of the length of the candlestick.
- Points: This is the zone between the opening and closing price. The candlestick’s body should not be larger than 1/3 of the length of the candlestick beam. The opening and closing prices of neighbouring bars are close to each other or perhaps identical.
- Pin Bar nose: This is the opposite of the tail. Pin Bar doesn’t have to have a nose. Sometimes the Pin Bar doesn’t have a nose because it opens and closes at the right price. The smaller the Pin Bar’s nose, the better the trading is.
What type of pin bar candles is available?
The pin bar is for straightforward patterns of forex candles found in all time frames, in all currency pairs, and usually in all types of market conditions.
They are known for introducing the potential change that is taking place in the markets. The pin bar is the basis of business strategies for price promotions.
Pin bar candlesticks don’t have a problem in themselves, so they need to be combined with other forms of price action and fundamental analysis to make them worth selling.
There are two basic types of pin bars: a bull pin bar, which indicates that the price can move up, and a bear pin bar, which indicates that the price can move down. Let’s discuss the two in detail:
- Bullish Pin Bar – This candle can be bull or bear; it doesn’t matter. It also has a small candle body somewhere on top of the candle. He had a sizable low tail, which indicated where the price was trying to move lower, and then ended up even higher after the area was rejected.
- Bearish Pin Bar – This candle can also be bear or bull, the colour that closes the candle is irrelevant to the setting. It has a small candle body under the candle, with a large long tail. The tail shows where the price tried to push up before rejecting the area and closing at a much lower price.
How can you trade with pin bars?
There are numerous entry options for traders when trading pin bars. The first, and perhaps most popular, is yet entering the pin bar trade “at the market.” That means you enter the trade at a current market price.
Note: The pin bar pattern must be closed before entering the market. It is not yet a pin bar until the bar is closed as a pin bar.
Another input option for the pin bar trading signal is to perform 50% retrieval on the pin bar.
In other words, you are waiting for the price to return almost to the middle of the entire pin bar range from high to low, or the “50% level”, where you already have a set limit for the input command.
The trader can also enter a signal on the pin bar using an “on-stop” record located below or above the top of the pin bar.
What are the best markets to sell pin bars?
The best markets for selling a pin-bar strategy are those where the price is highly volatile. The greater the price and order movement, the more opportunities you have to sell a pin bar and the greater the potential for large trading profits.
Markets like individual stocks, which always have a lot of holes, are not suitable for a pin bar.
The most popular markets are fast and free markets such as Forex, a popular cryptocurrency, and gold and silver.
Using of pin bar candlestick indicator
Pin bar candlestick patterns are often formed depending on how many time frames and brands you trade; it can be challenging to follow them all.
One of the excellent ways to make sure you don’t miss quality spin bar trades is to use an indicator that highlights it in your charts in real-time and sends you alerts.
You can download and use several quality spin bar indicators for free on MT4 and MT5 to ensure that you do not miss any trades.
Once you download the indicator, you can install it on your MT4 trading platform and then drag the indicator to the chart of your choice. The pin bar is one of the most famous formations that you can use in different market contexts.
The pin pattern indicator is easy to use and is not configured when you install it on charts. If the best pin indication moves, it schedules pin arrows on the price chart. For example, an up arrow shows the bull pin-bar and the bear pin bar with a down arrow.
Three strategies involved in a candlestick pin bar pattern
1. Waiting order outside the short shadow pattern
If so, we cannot wait for the second “eye” of the pattern to close. Therefore, if a bear pattern appears, you should stop selling under the bottom shadow as soon as the “nose” of the pin bar on the card closes.
If a strong pattern indicates that the price will return to the top, place the shopping stop above the upper shade of the “nose.”
2. Rollback entry
This position opening technique also involves pending orders, but these are limited orders this time. This order is placed at the middle level of the candlestick, which forms the “nose.”
With a bearish pattern at this level, we place a sell limit and a buy limit in case of a bullish one.
3. Level based entry
The best time to open stores is based on a pin-bar signal when they form next to a fixed level. For example, you can enter a wait command below the level if a bear pin bar is created below the horizontal resistance.
In the case of a strong pin bar, place the purchase order above the support level near where the pattern is formed.
Why does pin bar candlestick emerge?
When we tried to get to the end of the pin bar, we found that the pattern gave a reversal signal. So, what exactly is behind this pattern? First, let’s look at an example of a bear pin, where the middle candlesticks have a very long shadow.
An upward movement of the price precedes the pin bar. As a result, buyers pushed the price until they reached a solid level. An attempt to overcome this led to the launch of stop-loss orders below this level and the activation of pending sales orders.
The long shadow suggests that the light bulbs are not strong enough to support price increases.
Traders whose standing orders are open now hold short positions. After reflecting a strong resistance level, the remaining market players also open short positions, pushing the price down.
The level of trading strategy shows that a false breakthrough in the horizontal line with a shadow is a signal of a change in price and confirmation of the strength of the position.
Creating a pin bar next to the horizontal line of keys confirms the price change.
How do you find a pin bar on a chart?
The classic variant is formed near the support or resistance levels in the following way: 2 or more candles create a directional price movement (impulse), and then a Pin Bar is created around the support or resistance level.
It has a long shadow in the direction of the main price movement, a small body, and a slight shadow in the opposite direction. The signal will be performed by several other factors when creating the Pin Bar:
- The body of the Pin Bar is open and closed inside the body of the previous candlestick or completely misses the body (Gravestone Doji or Dragonfly Doji).
- Pin Bar opens and closes with Price Gap.
- The colour is against the direction of the pulse.
- The longer the natural price movement, the stronger the turn to Pin Bar.
What are the selection criteria requirements for choosing a pin bar?
- Its tail should be two to three times larger than the natural body (the bigger, the better).
- The smaller the pin/nose wick, the better. This is correct if the pin bar closes within 1/3 of its length.
- It should be enclosed in this previous range of columns (preferably the actual body).
- (LL) or (Higher High (HH)) must be within the range of the previous column.
Remember that according to the definition of a pin bar, it is a bar in which buyers or sellers reject a certain market level, and its LL or HH shows the point from which it enters the market.
The colour of the natural body of the pin bar does not matter. But if the colour is appropriate for the pin bar, if it is a downtrend and you get a bullish bar (green real body pin bar) for the buy signal, it will be much better. And its chances of success will increase.
1. Can the bullish pin bar be red?
It is still ascending as a price pattern if you have an ascending turnover at the seller (red). But, conversely, if you turn a bear pin bar that is a buyer’s bar (green), it’s still a bearish price pattern.
2. Are Hammer and Pinbar the same?
They are the same. The pin bar is a more modern term, and the ancient literature on candlesticks called them hammers. Like those who have worn babies on behalf of girls for the past two years!
3. What will happen to the bull pin-bar?
The bull pin-bar signal has an extended low end, suggesting a rejection of lower prices, with the result that the price will rise in the short term. When trading pin bars, there are several different entry options for traders. The first, and yet perhaps the most popular, is to enter the pin bar shop “on the market.”
4. Do you frequently get pin bar candlesticks?
You can see the pins created on the charts every day. In addition, the Tradingview Opens indicators are on the new tab. You can use it to display a pin, so you don’t have to scan it manually.
The pin bar candlestick is a simple but powerful formation that you can use in different market contexts.
It will help if you plug in other tools to increase the reliability of the pin bar. To sum it up, a candlepin pattern is one of the easiest ways to do business and go against the trend.
Depending on the area of the formation and its shape, the pin-bar candlestick can be used as a variation, such as a continuation pattern. Overall, the features of this candlestick are essential for successful card reading.
Jason Morgan is an experienced forex analyst and writer with a deep understanding of the financial markets. With over 13+ years of industry experience, he has honed his skills in analyzing and forecasting currency movements, providing valuable insights to traders and investors.
Forex Content Writer | Market Analyst