THE FIRST SIGNAL RECOGNIZES A MEANING PINBAR

Pinbar means in my definition that Pinbar can reverse waves (do not reverse the market), a Pinbar can create a top-bottom pivot.

However, not all Pinbar is like that. The proof is that you have already traded a lot, and you know that many times when you see the Pinbar, but then the price continues to follow the old trend, it doesn't make any sense.

So how do we know if the Pinbar tree is meaningful? The answer looks at the context and the candles around it. Want to evaluate a person's abilities objectively, look at the environment in which they live, and those around them. The same goes for candles. It's a Pinbar, you have to see where it is located. Let's see the previous example:

We have two factors that identify what a pin bar means:

+ It should be placed at a strong resistance/support zone. It's not like being weak, it's not going to help.

+ Before it should be candles showing the weaker trend. Specifically, in the above example, before the pin bar is the inside bar candle. This candle shows that the downward force has exhausted, the sellers are weak (if strong, the sellers will have already surpassed the previous candle). The next tree of the pin bar is a strong candle, with tail below showing that buying force has appeared, Buyers are strong. Selling force decreased, buying force increased, seller was weak, buyer was strong => the pin bar is a reasonable pivot.

SIGNAL SECOND RECOGNIZING A MEANING PINBAR

The sign above is not considering the size of the pin bar compared to the previous candles. At this signal, we will dig into this aspect.

To make a pin bar meaningful, we need to factor in the position and size of the pin bar relative to the surrounding trees.

Let's take this example to make it easy:


We default to the current trend is bearish, and the pin bar makes sense when it reverses up.

In the first image, the pin bar trunk is completely inside the previous candle. It is both the inside bar and the pin bar. This is a meaningful pin bar. In essence, this example and the above example are the same.

In the second image, the pin bar has a close higher than the high of the previous three. This shows that the buyers are outperforming the sellers (while the sellers are weak). Invisible, this plant is both the Engulfing Bar and the pin bar. This is a meaningful pin bar.

In the third image, the close was below the previous candle, which shows that the sellers have not disappeared yet. Although having a lower tail means the push is up, but the sellers are still very strong. The buy-side has just appeared, the sellers are still strong => how can the price increase. This is a pin bar that doesn't make sense.

THIRD SIGNAL RECOGNIZES A MEANING PINBAR

This sign is more probable than the two examples above. When both pinbars appear adjacent (or separated by a few candles). And in particular, the second tree has a longer tail than the first candle to represent a larger crowd being trapped a second time. For example:

It is similar to the tweezers top pattern, but to increase the probability of success, we should pay attention to its tail. In this example, the second candle (white candle) has a longer tail than the first one (black candle). Showing price rejection twice, 2nd time stronger than 1st time, selling force is determined to dominate. As a result, both pinbars make sense.

The above are 3 of the countless signs to analyze a meaningful pinbar candle.