The most important candlestick which can change your life for the better has been well explaianed with cahrt illustration, in the paragrphs below.
The Pin Bar: A Powerful Reversal Candle
A pin bar, or “Pinocchio Bar,” is a single candlestick pattern characterized by a small body and a long wick (or tail). This “nose” represents a dramatic price rejection—where price tests, but fails to sustain, a key level of support or resistance.Investopedia+14FXOpen UK+14TradingView+14
What Makes a Pin Bar Valid?
To qualify:
A type of pin bar candlestick in which long-tail wick is below the body of the candlestick is called bullish pin bar. The bullish pin bar indicates the reversal of the bearish trend. A good pin bar forms at the end of the bearish trend (oversold condition) and shows a clear price rejection from a specific support level.
- The candle’s body must be under 20–25% of its full height.
- The wick should make up at least 75–80% of the total candle length.ForexBee+1FXOpen UK+1
- The closing price must lie within the previous candle’s range.
- Ideally, it forms at a swing high or low, not mid-range.
Bearish Pin Bar
- Long upper wick, small body at the lower end.
- Shows rejection from resistance and signals a bearish reversal, usually after an uptrend.Investopedia+15ForexBee+15Tradeciety+15
- A type of pin bar candlestick in which the long tail is above the body of the candlestick is called a bearish pin bar.
- The bearish pin bar indicates the end of forces of bulls in the market and the start of a new bearish trend. The best pin bar forms in the overbought condition and at a specific resistance level. it is necessary to trade only pin bars that form at a certain key level. Because traders like to sell or buy from key levels like Round numbers, Fibonacci levels etc.
Psychology Behind the Pattern
Pin bars capture market manipulation: smart money “hunts” stops by pushing price beyond known levels, only to reverse—and in doing so, flip sentiment at important support or resistance zones.Price Action+7Price Action+7PrimeXBT+7
How to Trade Pin Bars: Step-by-Step
1. Identify Key Support/Resistance Levels
Pin bars are most reliable when they occur at established support or resistance zones—these levels add weight to the reversal signal.Price Action+1
2. Trade the Close (Not Just the Wick)
- Sell (Bearish pin bar): after candle closes below a resistance-located pin bar.
- Buy (Bullish pin bar): after candle closes above a support-located pin bar.Forex Broker Online+2Forex Broker Online+2
3. Optional Lower‑Timeframe Confirmation
Zoom into a higher timeframe pin bar on a lower timeframe: look for confirmation like an engulfing candle.ForexBee
4. Set Entries, Stops & Targets
- Entry:
- Long: Place buy-stop 10–20 pips above the pin bar’s high.
- Short: Place sell-stop 10–20 pips below the low of bearish pin.Forex Broker Online+1
- Stop Loss: 20–30 pips beyond the pin bar’s far end.
- Target: Aim for a 1:2 or 1:3 risk-reward; exit at next SR zone.Forex Broker Online
Common Rules & Mistakes to Avoid
- Only trade pin bars at key levels—not mid-range.
- Ignore weak candles that don’t meet criteria.
- Don’t trade pins within high volatility noise or without confluence.
- Avoid overtrading; focus on quality setups, not quantity.Daily Price Action+1PrimeXBT
Summary Table
| Element | Criteria |
|---|---|
| Body size | ≤ 25% of candle |
| Wick size | ≥ 75% of candle |
| Context | At swing points / key levels |
| Trade direction | Long at support pin bars; short at resistance pin bars |
| Entry zone | 10–20 pips past high/low |
| Stop-loss | Beyond pin bar tail |
| Target | 1:2 or better or next key level |
| Confirmation | Lower timeframe engulfing or trend filter |
Trusted External Resources
- PriceAction.com – Trading pin bars at key SR zones adds confluence to setups.Price Action+1
- DailyPriceAction.com – Pin bar plus inside-bar combination increases reliability.TradingView+9Daily Price Action+9Price Action+9
- RealTrading.com – Multi-timeframe and trend-aligned usage improves success rates.Real Trading
Final Thoughts
The pin bar is one of the most reliable single-candle reversal signals available—especially when it forms at key psychological levels and aligns with the broader trend. Used correctly—validated with SR zones, candlestick confirmation, and risk management—it becomes a high-probability strategy that solves ambiguity and enhances trading discipline.