Fibonacci, fractals, RSI, CCI, Pitchfork Tool, Volume, Gap And Scalping Trading Tips And Tricks
The Pin Candlestick Bar
If one is looking for a more reliable candlestick bar or pattern, it has to be the pin bar. Professional swing traders swear by the pin bar. Though, swing traders love the pin bar, day traders also capitalize on it. With its long tail or shadow (wick) on top, one can not miss it. Normally, one should wait for the second confirming bar before taking position, but professional traders who use different times frame usually begin to set, ready and go at the close of the pin bar. Instead of shooting in all directions, one should proceed one step at a time. The following are the steps one should take. 1/ Is the pin bar closed? it must close. 2/ Is it piercing through a key level after a pull back? 3/ If yes, adopt a bullish approach if the pin bar has a long tail. 4/ Is it piercing through a key level after a rally? 5/ If yes, adopt a bearish approach if the pin bar has a distinctive long shadow or wick at its top end.
6/ Whether it is a bullish or bearish pin bar, one must adopt a top-down trading approach.
Warning Please do not attempt to use this strategy before mastering the top-down trading method.
Generally, a bullish pin bar pierces through a key support level, but bearish ones pierce key resistance levels.
Note that a key level could be a normal horizontal price level but also a trend line, Fibonacci key levels and pitchfork tool lines.
Those key levels must be influential. I mean, one should ascertain if the pin bar is piercing an influential key level. It is vital that it is a major key level. If this not the case, leave it alone.
I recommend to traders to use a demo account until they become more agile in using the pin bar trading strategy.
A lazy day trader who does not check a higher time frame may look for the pin bar trading setups on 2H, 4H, or daily chart. Once a lazy day trader spots a pin bar trade setup, he or she must now use a multiple times frame trading method.
Similarly, a clever swing trader will be looking for the pin bar mainly on the monthly chart, but also on quarterly, yearly or week chart.
Talking About Leading Trading Signals
A reliable pin bar is more likely to produce a valid leading signal. Truly, a leading trading setup allows technical traders to anticipate the next price-action before it happens.
The bullish and bearish pin bars are really powerful candlestick bars if one masters them. If I would have to pick only one candlestick pattern, it will have to be the pin bar. Really the long tail of the bullish pin bar highlights a support level. It also depicts the activities of the bullish traders. One must make sure that the bar is at a major key level otherwise it is meaningless.
On the other hand, the shadow or wick on top of the bearish pin bar reveals what the bearish traders are up to after the price reaches the resistance zone. A deeper understanding of the pin bar will allow one to spot what really is a good pin bar trading setup.