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THE CANDLESTICK TRADING BIBLE
How to identify pin bar candlestick setups?
To be honest, quality price action setups don’t exist in the market,
because you will see that sometimes you can find a high probability
setup, you feel very excited about it and you take your trade with
confidence, but at the end, you will be frustrated because the signal
fails for unknown reasons.
That happens a couple of times, because the market doesn’t move due
to pin bar formations, what moves the market is the law of supply and
demand.
Let me give you an example, if you identify a quality pin bar candle
near a support key level in an uptrend market, this is a powerful buying
signal to take, you shouldn’t ignore it, but if the amount of money that
buyers put in this trade is less than the amount of money that sellers
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THE CANDLESTICK TRADING BIBLE
risk in the same trade, the market will not go in your predicted
direction.
If the signal fails, it doesn’t mean that your analysis is wrong, or pin
bars don’t work, it is just because the market didn’t validate your
decision, therefore, you accept your loss, and you look for another
opportunity.
You May ask yourself, why should we look for quality pin bar setups
if the market doesn’t respect them???
As you know, trading is a game of probabilities, there is no certainty,
this is why you should evaluate your pin bar setups from multiple
angles, and the fact that you are looking for quality setups means that
you are trying to put the probabilities of success in your favor which is
the right mindset of successful traders.
To determine whether or not a pin bar is worth trading, this price
action signal should respect the following criteria:
-The pin bar formed in bigger time frames such as the 4 hour or daily
time frame should be taken into consideration, because if you look at
smaller time frames, you can easily spot lot of pin bar signals, these
setups should be ignored, because smaller time frames generate lot of
false signals. See the illustration below:
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