Pin bar stock index price action method
A pin bar is a reversal signal on a stock indices chart which shows an obvious change in sentiment during that period.
This bar has a long tail with closing stock index price near the open.
The bar looks like a pin thus its name Pin Bar - forms after an extended move up or down.
This reversal is confirmed after market closes below the candle that precedes this pattern. Below the reversal is confirmed after the stock indices market closes below the blue candlestick that preceded this candle.
Combining with line studies:
This signal can be combined with other line studies such as Support and Resistance levels, Fibonacci retracement levels and stock indices trend lines can be used together with this stock indices signal to generate buy or sell stock index trades.
Support and resistance
A pin bar that forms after stock index trade price hits an important support or resistance level can be used as a signal to enter the stock indices market. When this pattern forms the trades taken should be in the opposite direction of the tail.
If the stock indices market moves up this forms a pin bar with tall upper tail, then the signal is to short.
If the stock indices market moves down the forms a pin bar with tall lower tail, then the signal is to long.
Combining with Support & Resistance
Stock Indices Trendlines & moving averages
Pin bars that form after stock index price touches a stock indices trend line or moving average can be used as signals to enter the stock index trading market.
Combining with Stock Indices Trend Lines
Combining with Moving Averages
Stock Indices Trading Fib Retracement Areas
Pin bars that form after stock index price touches a Fibonacci retracement level can also be used as signals to enter the stock index trading market.
Combining with Stock Indices Fibonacci Retracement Zones
These patterns are often formed near extremes in market swings, and they often occur at after false breaks. This is why this pattern is used to place trades in the opposite direction of the tail.
