Pin Bar is one of the special candlestick patterns and is easy to identify. It gives signals to open a safe transaction and has a high winning rate. This article will describe in detail about Pin Bar candlestick. I also guide you to trade options with this candlestick pattern in IQ Option.
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What is Pin Bar? Important features of Pin Bar candlestick
Pin Bar is seen as a form of candlestick shaped similar to a pin. It is easy to understand that the Pin Bar is a candle with a long tail and short body. The real body of the candlestick is tilted towards one side (top or bottom) of the candle.
Features of Pin Bar
Including 3 parts:
Candlestick tail (candlestick shadow) is very long. The length of the tail is proportional to the accuracy of Pin Bar pattern. Moreover, it makes a difference compared to other candlesticks.
Candlestick body is short, lying all the way to the top or bottom of the candle.
Candlestick nose is short or absent.
Pinbar includes 2 types
Bullish Pin Bar has the tail pointing down and the body pointing up.
Bearish Pin Bar has the tail pointing up and the body pointing down.
Why is Pin bar candlestick so important?
Pin bar candlestick is a signal of price action at a specific time. After opening, the price will move in a certain direction then reverse to the opposite direction.
Fast and decisive changes in a candle time period tell you exactly what the market wants. From there, you can predict the price in the future.
Differentiate Pin bar from Hammer or Shooting Star candlesticks
Visually, these candlesticks are the same. Bearish Pin Bar = Shooting Star. Bullish Pin Bar = Hammer. But in terms of meaning, Pin Bar is more complete.
Shooting Star and Hammer are two candlesticks that appear at the end of an uptrend. They are classified as a trend reversal candlestick pattern. Pin Bar is a single candlestick. Its appearance sometimes signals a continuation of the trend.
How to trade with Pin Bar candles in IQ Option
There are many ways to use Pin Bar to trade in IQ Option. And we will use Pin Bar as a signal candlestick.
The meaning of icons in the picture
Lamp icon is a signal to open a trade (option).
The green arrow icon is to open a Higher option when the signal has just ended.
The red arrow icon is to open a Lower option.
Technique 1: Trade with candlestick colors and Pin Bar in IQ Option
This is a reversal trade that bets on the color of the next candlestick (immediately after the signal Pin Bar). Green = HIGHER. Red = LOWER.
Requirements: Japanese 5-minute candlestick chart + Bollinger Bands indicator. The expiration time is 5 minutes. If you do not know how to trade IQ Option with candlestick colors, please read this article carefully. How to trade with candlestick colors in IQ Option platform.
Trading technique:
HIGHER (bet the next candlestick green) = Bullish Pin Bar candlestick is created outside the lower Band. Remember that the whole Pin Bar candlestick closes outside the Bollinger Bands completely.
Explanation: When the price moves out of the lower Bollinger Bands, it tends to reverse and bounce back. Combine with a bullish candlestick (Bullish Pin Bar) => The probability that a next green candlestick will appear is high.
LOWER (bet the next candlestick red) = Bearish Pin Bar candlestick is created outside the upper Band.
Explanation: When the price goes above the upper Bollinger Bands, it tends to reverse. Combine with a bearish candlestick (Bearish Pin Bar) => buy a Lower option, which bet on the next red candlestick.
Technique 2: Trading with Pin Bar candlestick and trend
This is a technique that has a high winning rate. Because it gives the best entry point. Identify price trend > Find signal entry points (Pin Bar).
Requirements: Japanese 5-minute candlestick pattern + SMA30 indicator. The expiration time is 15 minutes or more.
Trading technique:
HIGHER = Uptrend + SMA30 + Bullish Pin Bar
Explain: when the market is in an uptrend, the price is above SMA30. If it touches SMA30 indicator and creates a Pin Bar => The probability that it continues to increase is high. Open a HIGHER option.
LOWER = Downtrend + SMA30 + Bearish Pin Bar
Explain: when the market is in a downtrend, the price is below SMA30. If it touches SMA30 indicator and creates a Pin Bar => The probability that it will fall back to continue the downtrend is high => Buy a LOWER option.
Technique 3: Trade as a reversal candlestick pattern
Pin Bar is similar to Shooting Star and Hammer candlestick pattern. You can open reversal trades when Pin Bar appears. See more in the below articles.
– How to trade with Hammer candlestick in IQ Option
– How to identify and trade with Shooting Star candlestick in IQ Option
A clip of Pin Bar in IQ Option
Conclusion
Once you have read this article, you can open IQ Option app or website and practice Pin Bar identification. Especially, you should focus on the case of candlesticks created outside the Bollinger Bands or appearing in specific trends.
I will have more posts on this special Pin Bar candlestick pattern. Price action strategies are built around Pin Bar candlestick.
Thank you for reading this article. Please register for an IQ Option Demo account below to practice trading for at least 2 weeks before thinking of making money in this market.
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