Pinbar candlesticks in trading

Trading with Pinbar candlesticks

You only need 2 unique candlestick patterns to trade the market, which are pinbar and engulfing?
Pinbar is a candlestick that frequently appears on the chart. Pinbar is a candlestick that is most noticed by many traders. Pinbar is also one of the most important candlesticks that pop up in technical analysis in general and Price Action method in particular.

However, we have not yet used Pinbar effectively. There are still too many traders who trade mechanically when meeting this candle and leading to heavy losses. Usually, a book or someone teaches us that: every time you see a Pinbar, you will reverse, so every time you see a Pinbar, you will place an opposite order. I don't know about you, but the day I was taught about Pinbar, I was taught like that. As a result, I fell face-to-face with Pinbar countless times because the opinion is almost ingrained in the blood of new traders.

It's time to change your blood and change your mindset a bit. My today's article is not comprehensive and guarantees you winning trading with Pinbar. My purpose in today is just to share some additional knowledge for traders who are using Pinbar but not effective or traders who want to learn more about Pinbar. I will write more articles about this candle later, and there will be more untold stories.

THE FIRST SIGN OF RECEIVING A MEANING PINBAR

The meaning of Pinbar in my definition is that Pinbar can reverse the wave (don't reverse the market), a Pinbar can create a pivot high and low.

However, not all Pinbars are like that. The proof is that you have traded a lot already, and also know that many times when you see the Pinbar tree, but then the price continues to follow the old trend, it doesn't make any sense.

So how do we know the Pinbar tree that we find meaningful? The answer looks at the context and the candles around it. To assess a person's ability objectively, look at the environment they live in and the people around them. Candles too. It's a Pinbar, you have to see where it's placed. Let's see the previous example:

We have two factors to identify a meaningful pinbar:

It must be placed at a strong resistance/support area. Weak resistance is the same as not, it won't help.

Before it should be candles showing a weakening trend. Specifically in the above example, before the pinbar is the inside bar tree. This tree shows that the bearish force has exhausted, the sellers are weak (if strong, they have fallen past the previous candle). The next tree of the pinbar is a strong bullish tree, with a tail below it, indicating that buying power has appeared, Buyers are strong. The selling force decreases, the buying power increases, the seller is weak, the buyer is strong => the pinbar is a reasonable pivot.

THE SECOND SIGN OF RECEIVING A MEANING PINBAR

The signal above is not considering the size of the pinbar compared to the previous candles. At this sign, we will dig into this aspect.

For a meaningful pinbar, we need to consider the position and size of the pinbar relative to the surrounding trees.

Let's take this example to make it easier:

We default to the current trend as downtrend, and the pinbar makes sense when it reverses to the upside.

In the first picture, the body of the pinbar is completely inside the previous candle. It is both an inside bar and a pinbar. This is a meaningful pinbar. In essence, this example and the above example are one.

In the second figure, the pinbar closed higher than the high of the previous tree. This shows that the buyers are dominating the sellers (while the sellers are weak). In general, this tree is both an Engulfing Bar and a pinbar. This is a meaningful pinbar.

In the third figure, the closing price is below the previous candle, which shows that the bears have not disappeared. Even though a lower tail means an upward push, the bears are still very strong. The buyers are just starting to appear, the sellers are still strong => how does the price increase. This is a pointless pinbar.

THE THIRD SIGN OF RECEIVING A MEANING PINBAR

This sign has a higher probability than the two examples above. When both pinbars appear next to each other (or a few candles apart). And especially, the second tree has a longer tail than the first tree to show that there is a larger crowd trapped for the second time. Eg:

It is similar to the tweezer top pattern, but to further increase the probability of success, we should pay attention to its tail. In this example, the second candle (white candle) has a longer tail than the first candle (black candle). Shows price rejection twice, the 2nd time is stronger than the 1st time, the selling force is determined to take the lead. As a result, both pinbars make sense.

Above are 3 of the many signs to analyze a meaningful pinbar. If you still like the pinbar, please comment so I can continue telling the story. Lucky Trading!