Pin bar stocks price action method

A pin bar is a reversal signal on a stocks chart which shows an obvious change in sentiment during that trading period.

This bar has a long tail with the closing stocks price near the open.

The bar looks like a pin thus its name Pin Bar - occurs after an extended trend move up or down.

This reversal is confirmed after market closes below the candlestick that precedes this pattern. Below the reversal is confirmed after the stocks market closes below the blue candle that preceded this candlestick.

Combining with line studies:

This signal can be combined with other line studies such as Support and Resistance levels, Fibonacci retracement levels and stocks trend lines can be used together with this stocks signal to generate buy or sell stock trades.

Support and resistance

A pin bar that forms after stocks trading price hits an important support or resistance level can be used as a signal to enter the stock market. When this pattern forms the trades taken should be in the opposite direction of the tail.

If the stocks market moves up this forms a pin bar with tall upper tail, then the signal is to short.

If the stocks market moves down the forms a pin bar with tall lower tail, then the signal is to long.

Combining With Support and Resistance

Stocks Trend lines and moving averages

Pin bars that form after stocks price touches a stocks trend line or moving average can be used as signals to enter the stocks market.

Combining With Stocks Trend Lines

Combining With Moving Averages

Stocks Fib Retracement Levels

Pin bars that form after stocks price touches a Fibonacci retracement level can also be used as signals to enter the stocks market.

Combining With Stock Fibonacci Retracement Levels

These trading patterns are often formed near extremes in market swings, and they often happen at after false breaks. This is why this trading pattern is used to place trades in the opposite direction of the tail.