How to Trade the Pin Bar Pattern on Forex and Gold 🕯
The pin bar is a powerful price action setup that tells a fascinating story concerning price momentum and the possibility of an imminent reversal in price direction.
A pin bar is a Japanese candlestick that has a long wick on one side and a small body.
Understanding the story behind the pin bar is essential.
📚What does the pin bar candlestick pattern tell us about market psychology?
📉This pin bar followed a strong downward trend, and the presence of a long tail below the body tells us that the market rejected any attempt by overly exuberant sellers to move the price lower. The length of the tail speaks to the strength of the rejection.
📈The pin bar followed by a strong uptrend, and the presence of a long tail above the body tells us that the market rejected any attempt by overly exuberant buyers to move the price higher. The length of the tail speaks to the strength of the rejection.
⭐️The best pin bars are bearish pin bars that form at the top of an extended move up, and bullish pin bars that form at the bottom of an extended move down.
✅Entry and exit is very simple. If you are going short on a bearish pin bar, enter short when the next candle opens and ticks below the low of the bearish pin bar. If you are going long at your fx broker, enter long when the next candle opens and ticks above the high of the bullish pin bar.
❗️Keep in mind that these are general trading concepts that build on the collective experience of traders. Even though a lot of traders believe that these chart patterns have a bearing on the future direction of the price there are no guarantees in trading. Forex & gold trading is risky and you should never speculate with funds you cannot afford to lose.
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