The Pin Bar Candlestick Reversal Pattern in my opinion is the single most powerful candlestick reversal pattern there is! When identified correctly and traded the right way it will produce consistent profits time and time again.
What is a Pin Bar?
To understand what a pin bar is I must first discuss candlestick patterns. Candlesticks are formed using open, high, low and close of the chart time frame we are using. If the closing price is above the opening price then we will have a green/white bar. If the close is below the opening price then we will have a red/black bar. The filled section of the candle is know as the body and the thin lines poking above or below the body displays the high/low range also know as the shadows. The top of the upper shadow is the high and the bottom of the lower shadow is the low.
Long bodies indicate strong buying power or selling. The longer the body the more buying or selling pressure was present whereby short bodies imply very little buying or selling activity. The upper and lower shadows on the candle sticks provides us with important data about the trading sessions. A candlestick with long shadows indicates that trading occurred well past the open or close well with small shadows indicates the opposite.
A Pin bar tells us the story between the bears and the bulls. If we have a candle stick that has a long shadow ans short lower shadow, this indicates that the buyers where in control but throughout the session the sellers can in and drove the price back down to end the session near it open price. Example of this is the red pin bar below.
A candle stick that has a long lower shadow and a short upper shadow this normally means that the sellers where in control for most of that session, however the buyers came and drove the price higher to close near its open. Example of this is the blue pin bar seen above.
Conclusion
A Pin Bar is a candlestick pattern where the body of the candlestick is very small and has a very long wick. There are two types of Pin Bars a Bullish Pin Bar and a Bearish Pin Bar. A Bullish Bar is represented by a small body at the top and a long wick below, this indicates that price was sold down by the bears and then immediately bought straight back up by the Bulls. In a perfect world the close is above the open for a bullish pattern and no wick at the top of the body. The opposite of this is true for a bearish pattern.
Long bodies indicate strong buying power or selling. The longer the body the more buying or selling pressure was present whereby short bodies imply very little buying or selling activity. The upper and lower shadows on the candle sticks provides us with important data about the trading sessions. A candlestick with long shadows indicates that trading occurred well past the open or close well with small shadows indicates the opposite.
A Pin bar tells us the story between the bears and the bulls. If we have a candle stick that has a long shadow ans short lower shadow, this indicates that the buyers where in control but throughout the session the sellers can in and drove the price back down to end the session near it open price. Example of this is the red pin bar below.
A candle stick that has a long lower shadow and a short upper shadow this normally means that the sellers where in control for most of that session, however the buyers came and drove the price higher to close near its open. Example of this is the blue pin bar seen above.
Conclusion
A Pin Bar is a candlestick pattern where the body of the candlestick is very small and has a very long wick. There are two types of Pin Bars a Bullish Pin Bar and a Bearish Pin Bar. A Bullish Bar is represented by a small body at the top and a long wick below, this indicates that price was sold down by the bears and then immediately bought straight back up by the Bulls. In a perfect world the close is above the open for a bullish pattern and no wick at the top of the body. The opposite of this is true for a bearish pattern.
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