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Pin Bar Reversals Candlestick Patterns Trading Strategy


High accuracy “Pin Bar Reversals Candlestick Patterns Trading Strategy” – Candlesticks represent price and they show all data points at one glance.

Candlestick trading strategies involve determining the timing of market entry based on high probability patterns and managing the trade according to some predetermined rules that conform to your money management policy.

However, not all patterns offer the best win rate in the Forex market. Pin Bar reversals candlestick patterns are the best ones.

What is Pin Bar Reversal Candlestick Pattern

The pin bar reversal as it is sometimes called is defined by a long tail, the tail is also referred to as a “shadow” or “wick”. The area between the open and close of the pin bar is called its “real body”, and pin bars generally have small real bodies in comparison to their long tails. It is very important to have a SMALL NOSE on the pin bar.

Trading NOTES

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The tail of the pin bar shows the area of the price that was rejected, and the implication is that price will continue to move opposite to the direction the tail points.

Thus, a bearish pin bar signal is one that has a long upper tail, showing rejection of higher prices with the implication that price will fall in the near-term.

A bullish pin bar signal has a long lower tail, showing rejection of lower prices with the implication that price will rise in the near-term.

A Perfect Pin Bar must have:

  • Open and close within the previous bar
  • Candlewick minimum 3 times the length of the candle body
  • Have a small nose

 

Bullish Pin Bar



Bearish Pin Bar

Pinbar setups are triggered once the price of the next candlestick breaks above the body of the pin bar.

Once your order is triggered, you can look for the next support and resistance levels to find your primary profit target. If you are a short-term trader, you can simply target a reward to risk ratio of 2:1 or any other ratio that suits you.

SELL Rules

 

BUY Rules

 

However, when you find pin bars forming at the extreme high or low of a sustained trend, it would signal a complete reversal of the prevailing trend.

Hence, trailing your open position based on ATR or X-bar stop losses could be a good strategy as it would maximize your profit in the long-run.



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