On this candlestick, there is a small part called the "nose." The nose is smaller than the other two parts. A Pin Bar appears with its tail pointing down and the body pointing up. This means the price is falling, but one side is trying to pull it back up.
A Pin Bar or Pinocchio Bar is a single-candle reversal pattern characterized by a very long tail (shadow or wick) and a small real body near one end. It signals that the market forcefully tested a price level but was strongly rejected, indicating a potential reversal in the prevailing trend.
1. Bullish Pin Bar (Signals Buying Opportunity)
ЁЯСЙ How it looks :- It has a long lower tail (shadow) and a small body near the top of the candle. It resembles a hammer.
ЁЯСЙ Where it forms :- At the end of a downtrend or at a key support level.
тЬЕThe Story it tells ЁЯСЗЁЯСЗ
ЁЯСЙ During the session, sellers pushed the price sharply lower, creating the long lower wick.
ЁЯСЙ However, buyers (bulls) aggressively stepped in at those low levels, rejected the decline, and drove the price back up to close near the session's high.
ЁЯСЙ This indicates a failure of selling pressure and a takeover by buyers.
ЁЯЪжЁЯЪеЁЯЪжSignal ЁЯСЙЁЯП╗ The downtrend is likely exhausted, and a bullish reversal to the upside may begin.
тЬЕExample ЁЯСЙЁЯП╗ A stock opens at тВ╣100, sells off to тВ╣90 (creating the long tail) but then rallies strongly to close at тВ╣99.
2. Bearish Pin Bar (Signals Selling Opportunity)
ЁЯСЙ How it looks :- It has a long upper tail (shadow) and a small body near the bottom of the candle. It resembles a shooting star or an inverted hammer.
ЁЯСЙ Where it forms :- At the end of an uptrend or at a key resistance level.
тЬЕThe Story it tellsЁЯСЗЁЯСЗ
ЁЯСЙЁЯП╗ During the session, buyers pushed the price sharply higher, creating the long upper wick.
ЁЯСЙЁЯП╗ However, sellers (bears) aggressively stepped in at those high levels, rejected the rally, and drove the price back down to close near the session's low.
ЁЯСЙ This indicates a failure of buying pressure and a takeover by sellers.
ЁЯЪжЁЯЪеЁЯЪж Signal ЁЯСЙЁЯП╗ The uptrend is likely exhausted, and a bearish reversal to the downside may begin.
тЬЕExample ЁЯСЙЁЯП╗ A stock opens at тВ╣100, rallies to тВ╣110 (creating the long upper tail), but then sells off sharply to close at тВ╣101.
тЬЕImportant Key Points for TradersЁЯСЗЁЯСЗ
1. Wick Length ЁЯСЙЁЯП╗ The longer the tail, the stronger the price rejection and the more significant the signal.
2. Body Size ЁЯСЙЁЯП╗ The smaller the real body, the better. Ideally, the body should be at one extreme of the candle's range.
3. Close Location ЁЯСЙЁЯП╗ The closing price must be near the opposite end of the long wick.
4. Confirmation is Key ЁЯСЙЁЯП╗ The pattern is confirmed when the next candle closes in the direction of the reversal ( a green candle closing higher after a bullish pin bar).
5. Context is Everything ЁЯСЙЁЯП╗ A pin bar must be viewed within the context of the trend or a major support/resistance level. A pin bar appearing in the middle of a range has less significance.
ЁЯШКтЬЕSimple SummaryЁЯСЗЁЯСЗ
1. Bullish Pin Bar = Long Lower Tail + Downtrend = Buy Signal.
2. Bearish Pin Bar = Long Upper Tail + Uptrend = Sell Signal.
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