Pin bar stock indices price action method

A pin bar is a reversal stock indices signal on a stock indices chart which shows an obvious change in sentiment during that period.

This bar has a long tail with the closing stock indices price near the open.

The bar looks like a pin thus the name Pin Bar - occurs after an extended move up or down.

This reversal is confirmed after market closes below the candlestick that precedes this pattern. Below the reversal is confirmed after the stock indices trading market closes below the blue candle that preceded this candlestick.

Combining with line studies:

This signal can be combined with other line studies such as Support and Resistance levels, Fibonacci retracement levels and indices trend lines can be used together with this stock indices signal to generate buy or sell stock indices trades.

Support and resistance

A pin bar that forms after stock indices price hits an important support or resistance level can be used as a signal to enter the stock indices trading market. When a this pattern forms the trades taken should be in the opposite direction of the tail.

If the stock indices trading market moves up this forms a pin bar with tall upper tail, then the signal is to short.

If the stock indices trading market moves down the forms a pin bar with tall lower tail, then the signal is to long.

Combining with Support and Resistance

Indices Trend lines and moving averages

Pin bars that form after stock indices price touches a indices trend line or moving average can be used as signals to enter the stock indices trading market.

Combining with Indices Trend Lines

Combining with Moving Averages

Fibonacci Retracement Levels

Pin bars that form after stock indices price touches a Fibonacci retracement level can also be used as signals to enter the stock indices trading market.

Combining with Fibonacci Retracement Levels

These patterns are often created near extremes in market swings, and they often occur at after false breaks. This is why this pattern is used to place trades in the opposite direction of the tail.