85
THE CANDLESTICK TRADING BIBLE
As you can see in the chart above, bullish pin bars that were formed in
line
with the uptrend work, and they should be taken into
consideration.
But the bearish ones that were formed
against the trend should be
ignored.
-The anatomy of a pin bar is important as well,
you have to make sure
that the candlestick is a pin bar by looking at the distance between the
real body and the tail.
Pin bars with longer tails are more powerful.
The Psychology behind the pin bar candle formation:
Pin bars are formed when prices are rejected, this rejection doesn’t
indicate a reversal signal, because this
price action setup can form
everywhere in your chart.
The most important areas to watch when trading pin bars are major
key levels such as: support and resistance, supply and demand zones,
and moving averages.
The formation of this candlestick chart pattern in these levels give a
clear idea about what happens in the market.
If the rejection was near a support level for example, this is an obvious
indication that the bulls are more powerful, and they are willing to
push the market to go upward.
See the chart below:
86
THE CANDLESTICK TRADING BIBLE
If the formation of this candlestick
occurs near a resistance level, it
indicates that the bears reject prices,
and prevent the bulls from
breaking this level. So, this means that sellers are willing to push the
market downward. See the chart below:
