The Pin Bar Reversal Pattern – Let’s begin with my favorite candlestick called a pin bar. Like most formations, these can form as either a bullish or bearish signal. So what exactly qualifies as a pin bar?
Let’s take a look…
Pin bars are arguably the most effective ways to trade candlesticks because the pattern tends to create a high probability of price action.
Generally, pin bars represent an event in the market that affects both sellers and buyers. A pin bar reversal usually consists of a long tail, which is also known as the “shadow” or the “wick”.
- Download “TraderVersity-PinBarSystem” (Zip/RAR File).
- Copy mq4 and ex4 files to your Metatrader Directory …/experts/indicators/
- Copy the “TraderVersity-PinBarSystem.tpl” file (template) to your Metatrader Directory …/templates /
- Start or restart your Metatrader Client.
- Select Chart and Timeframe where you want to test your forex system.
- Right-click on your trading chart and hover on “Template”.
- Move right to select “TraderVersity-PinBarSystem” trading system and strategy.
- You will see “TraderVersity-PinBarSystem” is available on your Chart.
Trading Pin Bars against the Trend, From Key Chart Levels. When trading a pin bar counter to, or against a dominant trend, it’s widely accepted that a trader should do so from a key chart level of support or resistance.
The key level adds extra ‘weight’ to the pin bar pattern, just as it does with counter-trend inside bar patterns. Any time you see a point in the market where price initiated a significant move either up or down, that is a key level to watch for pin bar reversals.
- Best Time Frames: H4, and D1
- Recommended Markets: All markets
As a beginning trader, it’s easiest to learn how to trade pin bars in-line with the dominant daily chart trend, or ‘in-line with the trend’. Counter-trend pin bars are a bit trickier and take more time and experience to become proficient at.
Longer tails on a pin bar indicate a more significant reversal and rejection of price. Thus, long-tailed pin bars tend to be a little higher-probability than their shorter-tailed counter-parts.
Long-tailed pin bars also tend to see price retrace to near the pin bar’s 50% level more often than shorter-tailed pins, this means they are typically better candidates for the 50% retrace entry discussed previously.