What is Pin Bar Forex Trading Strategy with Pin Bar Definition
A pin bar is simply a price reversal pattern on a particular Forex price. Once you have a handle with the pin bar formation it is very useful and it can result is profitable decision making in any trading scenario. Lets go over what is pin bar formation is how you can use this bin bar strategy in different market conditions.
What is Pin Bar?
Pin Bar is a needle looking long pointed line which could be going upwards or downwards depending on which direction it is going in to. Pin bar could also be called a “wick”, “tail”, or “shadow” in a chart or a candlestick chart. See a candlestick chart here to see exactly what it looks like.
Some Important points about a Pin Bar
- A pin bar has a long upper or lower tail
- The other side of the non needle area is the body which is NOT the pin bar itself
- The longer the tail of the pin bar the better
- You want to see that the pin size is more than double of that of the body
Bullish Pin Bar
In a bullish pin bar the price is reversing because it shows that the current price is too low at that level of support. This leads to rise in price.
Bearish Pin Bar
In a bearish pin bar the price is reversing because it shows that the current price is too high at that level of support. This leads to drop in price.
Winning Speculative Trading with Pin Bar Strategy
Market entry: This means when the needle is bullish pointing down and you want to place a buy trade. The opposite is true so in a bearish pointing upwards and you want to place a sell trade.
Stop entry: This means to place a sell trade on a bearish pin formation and the opposite is true to place a buy trade on a bullish pin formation.
Limit entry: This means to place a trade around the 50% of the tail.
How to trade with pin bar using chart
Trading with pin bar strategy is one of the most effective way to trade forex. This could be one of the most powerful trading strategy you will learn.
Pin bars form at major market turning points, price correction levels or with a trend continuation.
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