PINBAR CANDLES

Remind again a little bit about pinbar candles. A pinbar candle is a candle with a long tail and tail other a small or absent. Represents a rejection of a price from a certain price range. As shown below:


To confirm the pinbar candle has formed you need to wait for the candle to close. That means, when you trade pinbar candles when it is not really formed, it will be very risky for you.

The picture below is up pinbar candle:


The picture below is a down pinbar candle:


A few notes for the strategy of trading with pinbar candles:
  • Timeframe: any
  • Indicators: no
  • Other tools: Trend line, horizontal resistance line, support resistance line.
STEP 1: IDENTIFY THE PINBAR CANDLES

The picture below shows a bullish pinbar candlestick pattern:


The previous trend is an uptrend, this pinbar candle is a signal of uptrend.

As can be seen, the sellers tried to push the price down but the buyers jumped in to stop this. That's why the bullish pinbar candles appear. The picture below shows a clearer context of the market:


STEP 2: FIND PAST PRICE ACTION TO LOCATE THE PINBAR APPEARING VALUABLE 

The picture below, same timeframe:


Thus the pinbar forming at the price zone was past resistance, and now it has turned into support. If the pinbar candlestick appears here indicating that buying pressure exists from this level. And this pinbar candle is a good signal for us to enter trend trading.

STEP 3: OPEN A POSITION

Place a buy pending command above the highest price of the bullish pinbar candle, and about 2 pips from the highest price. As shown below:


STEP 4: STOP LOSS

Place a stop-loss order about 5 pips from the shadow of the candle. The shadow of the candle pinbar is supporting if the price penetrates it is likely to increase selling pressure, which is a potential reversal signal, so we need to accept the stop loss and exit the market there. As shown below:


STEP 5: TAKE PROFIT

Take profit at the resistance (for a buying strategy) or support (for a selling strategy) nearest. As shown below:


SUMMARY

This is a simple trading strategy, you just need to identify a good support resistance. 

A pinbar candle forming at a critical resistance is much more valuable than appeared pin bar candlestick pattern halfway.

Although pinbar candles appear on all timeframes, keep in mind that the larger the pinbar on the timeframe, the stronger the signal will be.

Never trade every pinbar candle you find, instead go in sequence, evaluate the trend, momentum, find important support resistance in that trend, and wait for the pattern pinbar candles appear to enter trading.

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