There are a few types of candles. Pin bars are one of them. This kind of Japanese candles is distinguished by its shape. Today, I will show you the way to recognise pin bars and how to trade with them on the Binomo platform.
Pin bar candles specification
Pin bar candles can be easily identified by a very small body and a long shadow on one side. This shadow is usually about two-thirds of the whole candle. On the other side of the body, there is a very short wick or no wick at all.
Pin bars are the candles that are useful in the trending markets. They appear along with the trend and provide the information about the trend reversal.
There are two kinds of pin bars. Bullish and bearish ones.
Bullish pin bar candles
The bullish pin bars have a long wick pointed downward. They develop at the exhaustion point of the downtrend when the sellers lower the price and the buyers jump in to lift the price up. This is a signal of the trend reversal, the uptrend is imminent and that is why you should go long.
Bearish pin bar candles
The bearish pin bars’ long wick is directed upward. They appear during the uptrend when the trend is about to finish. The buyers are trying to keep the price up, but the sellers jump in and lower the price significantly. This gives the beginning of the downtrend and thus, you ought to open a short trade.
2 approaches to trading with the pin bars on the Binomo platform
Whenever you plan on using pin bars for trading, you must check the following requirements are fulfilled. One is that the candle develops completely. The second is that the market is trending.
How to trade with pin bars in the trending markets
You have already learned that the pin bars that form in the trending markets forecast the change in the trend. That is why you should enter the position that is in opposition to the current trend. When the pin bar forms during the downtrend, you should wait until it is finished and open a buy trade. When the pin bar is observed during the uptrend and it is fully developed, you should enter a sell transaction.
With 1-minute candles, your position should last around 5 minutes. When you are trading with the 5-minute candles chart, you can open a transaction for about 30 minutes.
How to trade pin bars according to their colour
Both, bearish and bullish pin bars may have a green or red colour. You do not identify pin bars by the colour, but by the direction of the long wick. Still, you can use them in trading based on colours.
It is highly probable that a green candle will appear after the bullish pin bar. Inversely, a red candle will develop after the bearish pin bar. Whenever you spot a green candle after the bullish pin bar you ought to go long. And when there is a red candle after the bearish pin bar you must open a short trade.
Pin bars are the special candles that appear along with the trend and are forecasting its reversal. Remember, they work only in the trending markets and you must wait until they fully develop. Give it a try and head on to the Binomo demo account. Practice a while before you move to the live account. Share your thoughts on the trading using pin bars and leave a comment in the section below.
Wish you success!
We are sorry that this post was not useful for you!
Let us improve this post!
Tell us how we can improve this post?
Download this article as PDF. (English)Enter your Email Address