This probably the number one Japanese candlestick formation used by swing traders. This an extremely powerful setup and if you only learn one price action formation, this should be it. Pin bars typically have the following characteristics:
- One shadow will extend out while the other should be very small or non‐existent.
- The extended shadow should be twice the length of the real body.
- Best played at swing highs or swing lows.
- The longer the shadow the stronger the signal.
Pin bars should be very obvious due to their large extended shadow. This large shadow shows that price met strong resistance/support at this level and was rejected and there is chance of a reversal. Pin bars are best played at swing highs/lows or at points of support/resistance.
Spend sometime looking at charts and look for pin bars at swing highs and swing lows. They are excellent at signaling the possibility of a change in trend. This candlestick formation is possibly one of the BEST formations and once mastered should provide a trader with extremely reliable and rewarding trades.
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