In today’s lesson, I am going to explain to you what Pin Bars are and how they can not only make your daily trading easier, but also break everything down into small lessons to make everything as easy as possible whether you are an advanced or newbie trader.
Using the Pin Bar Price Action Strategy has proven to be a highly effective and profitable system when used correctly and only takes a daily look at your charts. One other really neat thing about trading with pin bars is that you can use any charting system that you prefer.
So…What is a Pin Bar?
The word Pin Bar is short for Pinocchio Bar and is stating that the market is lying to us. During any given day, when a pin bar forms, it opened at a specific price and then ended almost back near that price from the direction it went throughout the day.
If you pull up a daily chart, I am sure you will be able to spot a few pin bars right now. Let me show you an example.
Some Rules for Accurate Pin Bars
- The Pin Bar Tail also known as the Shadow, must be at least 3 times the length of the Body
- The Body must be on one end of the Pin Bar…not in the center
- Price must close within the previous candle’s low for a bullish Pin Bar
- Price must close within the previous candle’s high for a bearish Pin Bar
- The Tail or Shadow must stick out below the previous candle’s low for a bull Pin Bar
- The Tail or Shadow must stick out above the previous candle’s high for a bearish Pin Bar
Using Pin Bars to Take Forex Price Action Trades
Now that you understand how to accurately identify a Pin Bar, spend this next week looking at your charts and identify them correctly.
There are many different way to utilize Pin Bars in your trading, so next week I am going to start with a very simple method on using them and with each new lesson that I send out every week, I will go more in depth and give my chart setups, etc to help you understand and be trading them effectively on your own like second nature!
Using The Pin Bar Break Method To Enter & Exit Forex Price Action Trades Up Next!
Next week I will go in-depth on using the Pin Bar Break Method to get you going and trading Pin Bars easily. Not only will you have the confidence to start taking trades, you will know the Limit or Stop order, TP (Take Profit) and SL (Stop Loss) to enter every day.
See you next week!