This is one of the reliable candlestick patterns that give us reliable signs to start a trade. Pin Bar candlestick is a pattern that we really want to introduce to you. Because it is a very special Japanese candlestick patterns and easy to use in Binomo. Let’s learn how to use Pin Bar and learn some strategies with this pattern.
- 1 What is Pin bar candlestick pattern? How to identify it?
- 2 Types of Pin Bar candlestick pattern
- 3 How Pin Bar candle works
- 4 The difference of Pin Bar from other patterns such as Hammer and Shooting Star candlestick
- 5 Trading strategies with Pin Bar candlestick pattern
- 6 Summary
What is Pin bar candlestick pattern? How to identify it?
Pin bar is one of the candlestick patterns that looks like a nail. This pattern has some features as below:
• The wick is long. The longer the tail, the more accurate the Pin Bar pattern. That’s why this pattern is different from other patterns.
• The body lies on one side of the candlestick (upper or lower side)
Types of Pin Bar candlestick pattern
Bullish Pin Bar signs the upward reversal. It has a long lower wick (shadow) and a short or almost no upper wick. Its body is small on the upper side.
On the contrary, Bearish Pin Bar indicates the downward reversal. It has a long upper wick and a short or almost no lower shadow. Its body lies on the lower side.
How Pin Bar candle works
When the price follows a trend, it will move in one certain direction. When Pin Bar candlestick pattern appears, the price can adjust for a short time but still keep following that direction.
The fast and strong change during the time a candlestick is created tells you which way the price will follow. From there, you can make profitable trades.
The difference of Pin Bar from other patterns such as Hammer and Shooting Star candlestick
The 3 patterns have the same form. The difference is the position that the pattern appears. If Hammer and Shooting Star appear at the end of the trend and are the signs of the market’s reversal, Pin Bar appears in the trend as a sign of the continuation of the trend.
The below picture is an example.
Trading strategies with Pin Bar candlestick pattern
There’s a lot of ways to combine this special candlestick with other indicators. They will give you reliable entry points to open correct orders.
Strategy 1: Trade with the candlestick color and Pin Bar is a sign of the price reversal
Requirement: 5-minute candlestick chart. Buy the order based on the candlestick color (the expiration time is equal to the candle time period) + Bollinger Bands (20;2).
How to trade: The price breaks the band (upper or lower band) + The appearance of Pin Bar.
Explanation: when the price breaks out of the upper band or lower band of the Bollinger Bands, it will tend to turn back. Pinbar candle appears to ensure this action of the price.
UP orders = The price breaks the lower band + Bullish Pin Bar.
Down = The price breaks the upper band + Bearish Pin Bar.
Strategy 2: Trade with the trend and Pin Bar
Requirement: Japanese 5-minute candlestick chart+ SMA30. The expiration time is 15 minutes.
How to trade: trend+ Pin Bar tests SMA 30.
Explain: When the price follows the trend, it will be only moving on one side of SMA30. If the trend is upward, the price moves beyond SMA30. If the trend is downward, the price moves beneath SMA30. If the price reverse and test SMA 30, it creates a Pin Bar candlestick pattern. This is the sign of the continuation of the trend.
UP= Uptrend + Bullish Pin Bar tests SMA30.
DOWN= Downtrend+ Bearish Pin Bar tests SMA30.
Strategy 3: Use Pin Bar as a reversal pattern
Pin Bar is just like Shooting Star and Hammer. You can open reversed orders when Pin Bar appears with other reversal indicators such as support/resistance.
This article is about how to use Pin Bar in trading orders. You can create an account to trade with Pin Bar immediately. In the next article, we will introduce more strategies with this pattern. Thank you for reading our articles.