I use these setups to trade a reversal in the market. I usually take a longer expiry in binary options like 15 min or 20 min. The chart is from USDJPY currency pair. Look inside the blue box. We have a candle with small or very small body which has also a very big wick. In this case we have a sign of a possible bearish reversal.

Many times, especially in a high volatility period we have so many candles like this with small body and big wick but the reversal never come.

So, I recommend this strategy in ranging markets and near important levels like supports and resistances, whole numbers, Fibonacci retracement etc. Why have we this big wick? There is this big wick because the price hit an important level which rejected the price strongly.

Personally, I am waiting for the first red or green candle after the reversal as confirmation because many times the price is trying to hit again these important levels after the rejection. Look at this chart. The red horizontal line is our resistance. In the first blue box as you can easily see we have a pin bar. This is a potential put. Small body, big wick. It is a Pin Bar Detector. Also known as a pinocchio bar, it acts as form of reversal candle, but more importantly, demonstrates an area where there is support or resistance.

Traders who have a lot of chart experience under their belts will be able to pick out pin bars easily, but for those new to the market, and who are having trouble identifying candlesticks and their patterns, this pinbar detector indicator provides a good foundation to learn the ropes.

Pin bars do not occur very often, and being able to pick them out quickly can help solidify your account. A green happy face signifies a price action movement predicted towards the upside, while a red happy face signifies a move to the downside.

However, in practice, this is not always the case. Just because the indicator detected the pin bar, it does not mean that a reversal is in play. It can sometimes make wrong calls in either direction, although I found that it works much better on a higher time frames where more traders are looking to profit. You can set it up to send alerts within MT4, and use e-mail alerts as well , as long as your SMTP parameters are setup, under Tools and Options. You can even customize the candle formation search settings in order to get more precise results.

It seems wise to use the pin bar detector, in conjunction with other indicators. This can be a simple moving average or some other form of oscillator that you can find within MT4.

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The Pin Bar binary options trading strategy comprises of a variety of very sophisticated, yet highly accurate, trading techniques involving the use of candlestick charts to analyze trends and predict price movements. The approach was first introduced by Martin Pring, a veteran trader in his book Pring on Price Patterns. In it, he described a particular candlestick formation which he referred to as Pinnochio Bars, whose shorter version is the Pin Bar.

The methodology he formulated has turned out to offer very robust and dependable reversal signals which can help a trader make very good trades, especially in a binary options trading platform. Typically, traders who prefer long trades look out for a long pin bar tail pointed downwards representing a rejection of lower prices meaning that prices will soon start rising.

On the other hand, traders seeking to short the market look out for a long pin bar tail pointing upwards, which represents a rejection of higher prices so that prices start falling soon.

It should be noted that at times, some fake pin bars are formed whose signals conflict with the recent price action. The fake pin bars can also be used by professional binary options experts to trade speculatively.

In this review, we hope to understand what the pin bar strategy entails, what some terms used mean, how the pin bar approach works, and how to best apply it in binary options trading. We will also learn from the experiences of binary options traders who have previously used this strategy in their trades. Back in the year , Martin Pring, one of the most acclaimed financial trading technicians wrote a very resourceful trading book, which is a must read for binary options traders hoping to make the most out of the markets by using all the technical tools already made available.

In it, he introduced a particular trading instrument called the Pin bar which refers to a certain kind of candlestick formation which explains the momentum of price reversal in trades. It is one of the most accurate instruments used to visually denote possible price reversals to the downside or strong losses of an uptrend in the market. A diverse version of the pin bar, known as the fake pin bar, is also used to make some shrewd trades when informed by additional information and in-depth analysis.

The fake pin bar should be avoided by amateurs since it is difficult to trade with as opposed to the other genuine pin bars. The pin bar strategy illuminates traders on the possible future trends in prices depending on the behavior of the pin bars recorded.

This market behavior is explained based on the shape and orientation of the pin bar that is composed of a long tail or wick, and a body.

For example, when the long tail of the pin bar points downwards, and the tail is at least two times the size of the body, it signals a possible rise in prices. This is called a bullish pin bar formation. When the long tail points upwards and the tail is at least two times the size of the body, it signals a possible fall in prices. This information will then help a trader decide whether or not to go long or short at any given time.

When a trader realizes that a pin bar has formed which signals a price movement that totally conflicts with the recent price movements, it is prudent that the trader treads very carefully. The formation of a fake pin bar can signal an amateur trader to start hedging.

For the professional traders, it can provide a perfect opportunity to make quick money through scalping or even through correction trading strategies. Overall, the pin bar strategy is one of the best approaches to trading since it provides a very reliable visual image of the market which offers a very straightforward decision mechanism for binary option investors.

Back in the 17th Century, there lived a man, a Japanese trader who by all means fathered modern day technical trading.

His name was Munehisa Homma. In his early days as a businessman, Muhenisa traded rice in the local Dojima Rice market. Over time, he honed his skills and with must trading acumen, cut himself a place in history by becoming one of the most revered traders when he founded the candlestick charts, a type of popular visual tools representing price action. His motivating factor was to understand the underlying psychology of traders in the local rice market.

Fast forward, in the year , another world-renowned trading expert called Martin Pring coined the term Pinnochio bars, whose short version is the Pin Bar, which refers to a specialized type of candlesticks which signal price reversals.

He attributed the name to the Pinnochio nose, another technical analysis tool. Martin went further to explain how the pin bar works and why it matters. True to his words, this trading strategy has proven to be extremely useful in the understanding of price movements, especially reversals and imminent fluctuations, a recipe for scalping.

Operators have come to widely accept pin bar trading approach since it makes their technical analyses a lot easier and bearable. It also helps them make some good returns in the binary options markets. Before we dive in to the technical details of how the pin bar strategy works, it is prudent that we first understand the basic terms used in this approach.

There are many technical terms involved but we will only explain the basics, though it is recommended that you do your own further reading to get the most out of this very useful strategy. The key words include the pin bar, the candlesticks, the inside bar and the fake pin bar among others. Candlesticks are the foundational instruments making up trend charts in a financial market platform. The Pin bar is a financial trading instrument made up of candlesticks with longer upper or lower tails and thin bodies.

Ideally, the tails of pin bars have to be at least two times the size of its body. They are used as indicators in candlestick charts to demonstrate specific behavior of prices including reversals and rebounds.

Pin bar formations are specialized patterns composed of pin bars which show how a certain asset value or price level has been negatively received in a market. It exposes false break levels in markets especially by the use of fake pin bars.

The behavior of pin bars must always reasonably be in concurrence with the previous price action. Fake Pin bars are a variant type of pin bars which form as a result of false breaks or totally irrational market behavior. Having understood the basic terminology, we can now go deeper and seek to understand how the pin bars work and how you, as a binary options trader, can use it to make guide trades. There is the bullish pin bar formation and the bearish pin bar formation.

When a trader notices that the long tail of the pin bar is pointing downwards, and the tail is at least two times the size of the body, it signals a possible rise in prices. Conversely, when the long tail is pointing upwards, and the tail is at least two times the size of the body, it signals a fall in prices. In summary, the following conditions have to be met for the trader to make correct predictions of price action the markets:. Condition I: The long Pin Bar tail should point upwards.

Condition III: The pin bar should not stick out from the price action. Condition I: The long Pin Bar tail should point downwards. Condition I: The long Pin Bar tail should point either upwards or downwards. Condition III: The pin bar should stick out from the price action.

Once any of the conditions listed above are satisfied, a trader can confidently make conclusions about the possible price movements in the immediate future. For example, if the bearish pin bar conditions are satisfied, the trader places a SELL order since this signifies a possible fall in prices. If the bullish pin bar conditions are satisfied, the trader places a BUY order since the indications are of possible rising prices.

On the other hand, if the fake pin bar is realized, traders are advised to tread carefully. Amateurs are advised to be extra careful while professionals can try their luck with the imminent fluctuations. Scalpers can make very good investments during moments after the formation of a fake pin bar. There is also the inside bar trading strategy which signals a continuation of established trends. This normally helps traders maintain the assets they hold.

It also gives them enough time to come up with better plans for making more from their investments. The beauty of the pin bar strategy is in its flexibility. It can be applied in many different types of binary options investment tools.

The technique can be used to identify established price trends in the classic binaries, the short term and even long term binary options as well as predict possible future price actions. Its results have also proven to be extremely reliable hence the large scale adoption in the binary options industry. For example, we have seen how traders can use certain pin bar formations and configurations to decide whether to place a CALL or a PUT in classic binaries.

We have also seen how it can guide traders using the One Touch Option especially when it comes to inside bars which signal continuation of price trends. Having established itself as an extremely robust trading technique, traders in the various review platforms have only good things to say about it. Its flexibility makes it very agile when it comes to application in the various investment tools available, and it reliability makes traders stick to it religiously.

Excellent returns on investments have nearly been guaranteed by this technical analysis tool owing to its ease of use. To the scalpers, the fake pin bar strategy has helped illuminate them on the imminent trade opportunities resulting from extreme market fluctuations. It has been noted that it is one of the best methods to use to know when to sell after a bulling retracement as well as when to buy immediately after a bearish pullback. Overall, most professional traders gave this strategy thumbs up.

There is no doubt that the pin bar binary options trading strategy is highly efficient and robust. It is also without a doubt the most reliable analytical tool for price actions in the binary markets. This is the reason we strongly recommend that you try out this strategy and make some good money off binary options trading. We hasten to note that this method works best when decisions made are informed by genuine market analysis and data. It is also worth remembering that for best results, combine this strategy with other existing strategies.

Rate Us. Quick Menu Register link Android link Main page Quick The Platform News Credits. Innovative platform for smart investments. HISTORY OF THE PIN BAR STRATEGY Back in the 17th Century, there lived a man, a Japanese trader who by all means fathered modern day technical trading.

HOW THE PIN BAR STRATEGY WORKS Before we dive in to the technical details of how the pin bar strategy works, it is prudent that we first understand the basic terms used in this approach. No ratings yet. Please rate this Rate Us. Post a Comment Post a Comment.

Open long trendy options to achieve the highest level of accuracy. As mentioned before, pin bar candles are a signal of trend exhaustion. With this combo pattern, you can trade binary options, but you need one more element. Ideally, the tails of pin bars have to be at least two times the size of its body. EDITOR PICKS. It exposes false break levels in markets especially by the use of fake pin bars.

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