The candlestick trading bible

87
THE CANDLESTICK TRADING BIBLE 
If you understand the psychology behind this price action pattern 
formation, you will be able to predict what is likely to happen in the 
future, and you will make good trades based on high probability pin 
bar signals. 
 
 

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88
THE CANDLESTICK TRADING BIBLE 
Trading the pin bar candlestick with the trend 
If you are a beginner trader, i highly recommend you to stick with the 
trend, because pin bars that occur in trending markets offer good 
trading opportunities with high risk/reward ratio. 
When you master trading it with the rend, you can then move to trade 
range-bounds markets or even counter-trends. 
This strategy is simple, you start by identifying a clear uptrend or 
downtrend, and you wait for a pin bar to occur after a pullback to 
support or resistance level.
See the example below: 
The figure below shows how this price action signal works if it is traded 
with the trend, as you can see, the price was rejected from the 

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89
THE CANDLESTICK TRADING BIBLE 
resistance level which indicates that the bears are still in charge of the 
downtrend. 
The formation of the pin bar indicates the end of the retracement 
move, and the beginning of the impulsive move at the resistance level 
in line with the downtrend. 
This is a high-quality setup because all the following criteria are 
respected:
1-The pin bar is well formed, and it is in line with the direction of the 
market. 
2-The rejection occurred in a major key level which represents a hot 
point in the market (resistance level). 
3-The risk to reward ratio is good, and it is worth trading. 
Sometimes, even if the market is trending, we can’t draw support and 
resistance levels, because prices move in a certain way which we can’t 
spot static key levels.
If you are in this situation, you can use the 21-moving average which 
will act as a dynamic support in an uptrend market and a dynamic 
resistance in a downtrend market.
See the illustration below: 

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