Pin bar price action method

A pin bar is a reversal signal on a chart which highlights an obvious change in sentiment during that period.

This bar has a long tail with closing price near the open.

Bar looks like a pin thus the name Pin-Bar - occurs after an extended trend move up or downward.

This reversal is confirmed after market closes below the candlestick that precedes this pattern. Below the reversal is confirmed after the market closes below the blue candle that preceded this candle.

Combining with line studies:

This signal can be combined with other line studies such as Support and Resistance levels, Fibonacci retracement levels and trend-lines can be used together with this signal to generate buy or sell trades.

Support and resistance

A pin bar that forms after trade price hits an important support or resistance level can be used as a signal to enter the market. When this pattern forms the trades taken should be in the opposite direction of the tail.

If the market moves up this forms a pin bar with tall upper tail, then the signal is to short.

If the market moves down the forms a pin bar with tall lower tail, then the signal is to long.

Combining with Support and Resistance

Trendlines and moving averages

Pin bars that form after price touches a trend line or moving average can be used as signals to enter the market.

Combining with Trendlines

Combining with Moving Averages

XAUUSD Fib Retracement Areas

Pin bars that form after price touches a Fibonacci retracement level can also be used as signals to enter the market.

Combining with XAUUSD Fibo Retracement Zones

These patterns are often created near extremes in market swings, and they often happen at after false breakouts. This is why this pattern is used to place trades in the opposite direction of the tail.