Pin bar stocks price action method
A pin bar is a reversal stock signal on a stock chart which shows an obvious change in sentiment during that period.
This bar has a long tail with the closing stocks price near the open.
The bar looks like a pin thus the name Pin Bar - occurs after an extended move up or down.
This reversal is confirmed after market closes below the candlestick that precedes this pattern. Below the reversal is confirmed after the stocks trading market closes below the blue candle that preceded this candlestick.
Combining with line studies:
This signal can be combined with other line studies such as Support and Resistance levels, Fibonacci retracement levels and stock trend lines can be used together with this stock signal to generate buy or sell stocks trades.
Support and resistance
A pin bar that forms after stocks price hits an important support or resistance level can be used as a signal to enter the stocks trading market. When a this pattern forms the trades taken should be in the opposite direction of the tail.
If the stocks trading market moves up this forms a pin bar with tall upper tail, then the signal is to short.
If the stocks trading market moves down the forms a pin bar with tall lower tail, then the signal is to long.
Combining With Support and Resistance
Stock Trend lines and moving averages
Pin bars that form after stocks price touches a stock trend line or moving average can be used as signals to enter the stocks trading market.
Combining With Stock Trend Lines
Combining With Moving Averages
Stock Trading Fibonacci Retracement Levels
Pin bars that form after stocks price touches a Fibonacci retracement level can also be used as signals to enter the stocks trading market.
Combining With Stock Trading Fibonacci Retracement Levels
These patterns are often created near extremes in market swings, and they often occur at after false breaks. This is why this pattern is used to place trades in the opposite direction of the tail.