Experiences in forex trading, by a special way.

November 14, 2022

4 Notes When Trading With Pinbar

4 Notes When Trading With Pinbar is an article that gives you another perspective on this very popular and widely applied candlestick pattern.

First, let's review the concept of the Pinbar pattern, it is shown as follows:


A bearish pinbar is a pattern with long upper shadow + short body + short lower shadow.

A bullish pinbar is a pattern with long lower shadow + short body + short upper shadow.

The color of the pinbar is not so important in theory, it can be green or red (white or black / bullish or bearish), but a bearish pinbar is red or a bullish pinbar is green have higher reliability.

And here are 4 notes when using the pinbar candlestick pattern:

1. PINBAR IS REALLY RELIABLE:

This is my first affirmation, if you really appreciate the pinbar and want to apply it effectively, then you must first have faith in this candlestick pattern. At the very least, that will help you get through the tough times on your journey to conquer the forex market.

Pinbar is reliable because it gives a signal of possible reversal. Note that the reversal signal is just a MAY happen, it is not certain, but this is the earliest signal from the market, which is represented by the candlestick. Because when the Pinbar appears, it shows that the market has quickly rejected a new price, and returned to close the session around the old price. This is both a technical expression, as well as a manifestation of trading psychology in the market.

Many traders only use pinbar to enter orders when it appears at resistance or support areas, in these areas, if pinbar appears, usually the trading volume also increases, and it is reliable.

2. PROFIT OBJECTIVES WHEN USING PINBAR:

The effect of the pinbar is to signal a reversal, to catch the top and bottom of the wave, but where do you expect the price to reverse and go? This is very important, because if the Pinbar appears at the support or resistance areas, with a strong increase in trading volume AND the trend is in favor, then you are completely capable of hitting your long target. On the contrary, only short goals should be set.

3. STANDARD PINBAR SAMPLE:

In my opinion, to eliminate the error of pinbar error. The standard pinbar pattern must satisfy the following conditions, then we should trade:

- There is a long shadow: Pinbar indicating a decrease has a long upper shadow, a pinbar indicating an increase has a long lower shadow. The length of the candle's shadow is at least twice the length of the candle's body. The shadow of the pinbar has a very special meaning, it both shows that the market has rejected a new price, and this rejection happens VERY FAST and DEFINITELY (in 1 trading session).

- Never use the concept of compounding candles: The long shadow of the pinbar also has a cyclical element. So, a pinbar is literally an independent candle with a long shadow (in a trading session the price quickly ran a full round), it does not mean a pair of 2 candles of different colors combined (in 2 new price trading sessions run 1 full round). Although, at the peak and trough areas of the wave, if a pair of candles of different colors occurs, the reversal rate is also quite high, but it is not as high as a single pinbar candle. Since I always strive for the highest accuracy rate, I personally never use the concept of candlestick aggregation.

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- Pinbar construction on smaller timeframes: When viewing the pinbar on smaller timeframes, if it is a HEAD AND SHOULDS (or its variation), it will be better.

- The size of the pinbar: The length (magnitude) of the pinbar should be at least equal to 1 regular candle. Pinbars that are too small often have little effect, or they are not a clear indicator of market reactions. The size of the pinbar is also an indicator of trading volume - a very important factor in technical analysis. You will easily notice in quiet trading sessions (low liquidity) if there is a pinbar, it will usually be small.

- Position of the pinbar: In the area closest to the current, if the pinbar appears with a long shadow, but the shadow doesn't enter the new price zone, it will be of little value - even worthless. to give a reversal signal. Only when the long shadow of the pinbar enters a new price area, it is a manifestation of the market's QUICK and DEFINITE RELEASE to that price area, then the reversal signal is truly reliable.

4. TIME TO ENTER:

This is a cyclical factor. Because, each different time will have different market participants, different trading sessions, different trading volumes, so the effectiveness of the model is also different. In order to improve the efficiency of trading with pinbars, as well as choose the ideal time to enter orders, it depends on each trader's experience, it will gradually improve over time.

Best regards,

CaPhiLe.Com

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