It is not natural that technical analysts separate Pin Bar from other Japanese candlesticks. In this article, I will show you how to identify a Pin Bar candle pattern. Also, I will explain what the meaning of Pin bar candlestick is as well as introduce effective binary options trading strategy to you.
Video on how to identify and trade Binary Options with Pin Bar
In this article, we will introduce what a Pin Bar candlestick is. The characteristics, meaning, and usage of Pin Bar candle patterns in options trading are also available.
What is Pin Bar candlestick?
When entering the financial market, the first thing you see is the Japanese candlestick chart. It has distinct shapes that reflect the price action of the market. And among them is a very different candlestick that looks like a pin – Pin Bar.
Pin Bar is a candle shaped like a pin with an outstanding long shadow and small body.
Characteristics of Pin Bar
Pin bar candle must have the following features:
– Tail (aka wick or shadow): The Pin Bar is a candle with a long upper or lower tail. That is the highlight of a Pin Bar that shows a strong rejection of prices. The Pin Bar tail must be at least 2/3 of the length of the candlestick bar.
– Body: This is the zone between the opening and closing prices. The body of a candlestick must not be longer than 1/3 of the length of the candlestick bar. The opening and closing prices of adjacent bars are close to each other or maybe equal.
– Pin Bar nose: This is the opposite of the tail. A Pin Bar does not necessarily have a nose. Sometimes, the Pin Bar doesn’t have a nose because it opens and closes right at the closing price of the candle. The smaller the Pin Bar nose is, the better it becomes.
Two Pin Bar candlestick patterns
As for the Bullish Pin Bar, the body is closer to the top of the candlestick. Conversely, for the Bearish Pin Bar, the body of the candle stays closer to the bottom of the candlestick.
Meaning of Pin Bar
When the Pin Bar candle appears, it signals that the price is rejecting a specific price range. It expresses through the strength of the tail of the Pin Bar candlestick.
Visually, the Bullish Pin Bar and the Hammer candlesticks are the same. And the direction of prices is also the same.
Bearish Pin Bar has a similar pattern to a Shooting Star candlestick. When looking at the price action of these 2 candles, there is not much difference.
Regarding the price action on the chart, the Hammer candle is similar to the Bullish Pin Bar. And the Shooting Star candle has the same movement as the Bearish Pin Bar.
To understand the meaning of Japanese candlesticks, you can see details in this article: What Is The Japanese Candlestick? The Truth And Importance Of The Japanese Candlestick Chart.
How to trade binary options with Pin Bar
Currently, the methods of trading using Pin Bar are very diverse. Depending on the view of each trader about the market, they can apply appropriate strategies to improve efficiency. You can open options with Pin Bar candles individually or combine them with trend indicators such as SMA, Alligator, etc., to improve accuracy.
Binary Options trading strategy only with Pin Bar
Conditions: A 5-minute Japanese candlestick chart. The expiration time of 5 minutes.
Open an UP option: A Bullish Pin Bar appears on the candle chart.
Open a DOWN option: A Bearish Pin Bar appears on the chart.
This is how to trade binary options according to the color of the candlestick. This means: Once the previous Pin Bar has just closed, you must open an order immediately to bet the next candlestick.
How to open options using Pin Bar and Support/Resistance
Conditions: A 5-minute candlestick chart. The expiration time of 15 minutes or above.
How to open an option:
Open an UP option: A Bullish Pin Bar appears and touches the support zone.
Explanation: When prices touch the support, the probability of the market continues to rise is high. Bullish Pin Bar candle is considered a safe entry signal for UP options.
Open a DOWN option: A Bearish Pin Bar appears and touches the resistance zone.
Things to note when using Pin Bar to trade binary options
The longer the candle time period of the Pin Bar candlestick (Japanese candlesticks chart) is, the higher the accuracy becomes.
The shorter the nose is, the safer the Pin Bar becomes. The tail of the candle must be as long as possible, accounting for at least 2/3 of the length of the candle. The body of the candle is short, lying completely on one side or the bottom of the candlestick bar.
To increase the accuracy of options, you should combine Pin Bar candle pattern with trend indicators. Open long trendy options to achieve the highest level of accuracy.
This article may help you understand more about the Pin Bar candle patterns with relatively high safety. Let’s experience and complete Pin Bar trading strategy with a Demo account.