4 Important Notes When Trading with Pinbars

Pinbars are one of the most popular and widely applied candlestick patterns in Forex trading. In this article, we look at four important considerations when using pinbars, based on my personal experience in real trading.

Before going deeper, let’s quickly restate the basic concept of a pinbar:

• A bearish pinbar has a long upper wick, small body, and short lower wick.

• A bullish pinbar has a long lower wick, small body, and short upper wick.

• The color of the candle is not essential, but a bearish pinbar tends to be more reliable if it is red, while a bullish pinbar is more trustworthy if it is green.

Pinbars are often used together with major price levels and are an important component of many price action systems.

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1. Pinbars Are Truly Reliable

If you want to fully utilize pinbars, you must first believe in the reliability of this candlestick formation. Confidence helps you stay steady during the long and difficult journey of trading.

Pinbars are reliable because they represent a potential reversal signal. “Potential” does not mean “guaranteed,” but it is often the earliest warning the market provides. When a pinbar forms, the market has rejected a new price level quickly and decisively and returned to close near the previous price zone. This shows both technical rejection and psychological rejection.

Many traders only take pinbar trades when they form around key levels (support or resistance). At these areas, trading volume often increases and the signal is more trustworthy. This aligns well with foundational Forex concepts such as market structure and trend analysis. (See the article “Basic Forex Concepts” here: https://www.caphile.com/2025/11/basic-forex-concepts.html)

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2. Profit Targets When Trading Pinbars

Pinbars are reversal signals, and they help us catch highs and lows. However, what matters is:

How far do you expect the price to move after the reversal?

This depends heavily on:

• Whether the pinbar appears at a major technical level

• Whether higher timeframes support the reversal

• Market conditions at the moment

Example:

On H4, the market is trending upward and price pulls back into support. On H1, a bullish pinbar appears. In this case, a long trade with a larger target is much more reasonable than if the same pinbar appeared at a random non-significant price zone.

Likewise, not all pinbars must lead to big moves. Sometimes, only a small target (e.g., 30 pips) is needed. If you want a high-probability 30-pip target, instead of searching for pinbars on M15, one pinbar on D1 or W1—even without a perfect level—may give you enough room because a single candle on a large timeframe often moves much more distance.

This emphasizes a critical trading idea:

Your profit target must match the timeframe and context where the pinbar appears.

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3. Characteristics of a Standard Pinbar

Not every pinbar is equally valuable. Over time, I have filtered trading experiences into a clearer definition of what I consider a “standard trading pinbar.” A pinbar should ideally meet the following conditions:

A. Long wick

• Bearish pinbar → long upper wick

• Bullish pinbar → long lower wick

• Wick should be at least twice the size of the body
  A long wick shows immediate and decisive rejection within a single candle session.

B. Never rely on “candle merging”

Some traders combine two candles of opposite colors and call them a pinbar. Although this may work at swing highs or lows, the reliability is not as strong. A pinbar must be a single candle where the rejection happens in one session.

C. What it looks like on a smaller timeframe

On a smaller timeframe, a pinbar should form a structure similar to a Head-and-Shoulders (or inverse H&S). If this pattern completes right when the pinbar closes, you can often enter immediately.

If only the left shoulder and head have formed, wait patiently for the right shoulder to develop before entering for a safer and more optimal trade.

D. Size of the pinbar

The size of the candle should not be smaller than an average candle. Tiny pinbars usually reflect quiet market conditions and have limited value. They often appear in low-volume sessions (such as Asian open).

E. Location of the wick

If the long wick does not reach into a new price zone, the pinbar has reduced value.

Only when the wick pushes into new territory and is aggressively rejected does the signal truly represent immediate market rejection.

Example (EUR/USD D1):

• Pinbar #1: Lower wick equals previous candles, does not break new territory → weak signal

• Pinbar #2: Upper wick pushes higher than nearly 20 previous candles → strong reversal and excellent risk-reward opportunity

This aligns well with methods introduced in articles such as “How to Accurately Identify Forex Trends”:

https://www.caphile.com/2025/11/how-to-identify-forex-trends.html

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4. Best Timing to Enter

Timing is the hidden secret behind many price action systems. With experience, each trader forms a preferred entry window.

For me:

If I trade a D1 pinbar, the best entry usually comes late morning to mid-afternoon Vietnam time (start of the European session). By then, on M30, the right shoulder of the structure is often complete, and the price is ready to move in the direction of the pinbar.

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Final Thoughts

Pinbars are extremely powerful when properly understood. Many traders combine them with their existing systems, while others build entire trading strategies based solely on pinbars—and succeed consistently.

If you truly understand:

• The meaning of the wick

• Market psychology

• Trend context

• Timeframe interaction

• Entry timing

…then pinbars can become a reliable and highly profitable tool in your trading arsenal.

Thank you for reading and sharing!

Respectfully,

CaPhiLe.com