Anatomy of a Pin Bar.
The tail (shadow) is the most important part. A long tail at a resistance level indicates sellers are in control despite an earlier attempt to break higher.
The body should be contained within the previous candle's range for maximum effectiveness.
How to trade them.
- Bullish Pin Bar: Tail points down, signaling rejection of lower prices.
- Bearish Pin Bar: Tail points up, signaling rejection of higher prices.
- Enter at the break of the nose or the 50% fib level of the tail.
- Stop loss goes just beyond the tip of the tail.
Location is everything.
A Pin Bar in the middle of nowhere means nothing. A Pin Bar at a daily support level or a 61.8% Fibonacci level is a high-conviction signal.
FAQ
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