Pin bar price action method
A pin-bar is a reversal signal on a chart which portrays an obvious change in sentiment during that period.
This bar has a long tail with closing price near the opening.
Bar looks like a pin thus the name Pin Bar - forms after an extended move up or down.
This reversal is confirmed after market closes below the candle 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 tools like Support & Resistance levels, Fib retracements and trend lines can be used together in combination with this trading signal to generate buy/sell trades.
Support and resistance
A pin bar that forms after the price hits an important support resistance level can be used as a trade signal to enter in to the market. When a this pattern forms the transactions taken should be in the in the opposite trend trend market trend trend market trend trend direction of the tail.
If the market moves upwards this forms a pin bar with tall upper tail, then the signal is to short.
If the market moves down then forms a pin-bar with a tall lower tail, then the signal is to long.
Combining with Support and Resistance
Trend lines and moving averages
Pin-bars that form after price touches/tests a trend line or moving average can be used as signals to enter the market.
Combining with Trend-Lines
Combining with Moving Averages
Forex Fib Retracement Levels
Pin-bars that form after price touches/tests a Fib retracement can also be used as signals to enter the market.
Combining with Fib Retracement Levels
These patterns are often developed near extremes in market swings, and they often occur at after false breaks. This is why this setup is used to place trade positions in the direction in the opposite trend of the tail.
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