Bullish pin bars usually show a sharp reversal and also price rejection. This time we will learn about the characteristics, strategies, and examples of trading with bullish pin bars themselves. To better understand it, you can read the article below. Also, be sure to read other articles such as Bullish Reversal: Characteristics, Conditions, Examples, and Benefits

What is Bullish Pin Bar

A bullish pinbar shows a rejection of lower prices. A lower wick shows bears were in control previously but were eventually overcome by bulls. A bearish pinbar shows a rejection of higher prices. A higher wick shows bulls were in control previously but were eventually overcome by bears.




A pin bar is a single candle with a significant tail, and a very short or almost non-existent body. To fit the definition, the tail must cover at least 70% of the candle. This means the candle opened at a certain price, moved away from that price, but came back close to the opening point for the close. These bars can form at any time, but form a strong pattern when they appear near a support or resistance level. When price rejects these levels, a pin bar will form and smart money will follow to start a new reversal trend.




The psychology behind pin bar candles

Let’s try to understand what makes up a pin bar candle. When the market approaches a significant price level (supply or demand level), it can do several things. It can break through it, it can consolidate near the level, it can reject the level, or it can reject it AGGRESSIVELY. When the market rejects a level aggressively, more money will follow. This will tend to start a new directional move in the direction of the pin bar candle. This is why pin bar patterns are so reliable, and they present an opportunity for you to join the smart, big money.

Characteristics of the Bullish Pin Bar Pattern

The following are the characteristics of the bullish pin bar pattern. The characteristics are:
  1. First Requires long standing support or resistance in the background
  2. Price rallied above resistance only to fall back below. Price closed below resistance and at or near its low. pullback to support
  3. The "axis" (or tail) should be at least 2 - 3 times the length of the body.
  4. The body must be completely contained within the range of the previous day. The body is red or black
  5. The body should be at the upper or lower end of the Pin Bar.
  6. The wick should stand out compared to the surrounding bars. The Pin Bar wick should be larger than the previous day's trading range.
  7. Next day need confirmation
  8. Volume can be low (no demand above resistance) or high (supply overcomes demand above resistance), vice versa for support.

Bullish Pin Bar Example

Now we look to combine all the rules we discussed above to create a coherent trading methodology around the pin bar setup. Our pin bar trading system will begin by opening a trade once the candle closes outside the smaller wick of the pattern. A stop loss will be placed outside the longer wick of the pattern. We will use price action techniques to determine the right time to close the trade. See the image below:




Let’s take a look at the EUR/USD chart above. The chart starts with a price drop. Suddenly we see a bullish pin bar candle on the chart. The lower wick of the candle is below the general price action. Therefore, we confirm the authenticity of the pattern. The next candle that appears after the pin bar closes above the upper wick of the pattern. This is a good time to open a long trade based on our pin bar trading plan. The price goes up after that. Note that on the way up, EUR/USD creates a clear support level (blue line).

If the price breaks this support to the downside, then the trade should be closed based on price action rules. The support successfully held the price pressure and EUR/USD made a new bullish move. At the end of the second bullish impulse, we see a Harami Reversal candle pattern. This formation could possibly reverse the bullish trend that emerged after the pin bar pattern. Based on this price action, we may feel that this is a good time to close.

How to Trade Bullish Pin Bars

Here is a way to trade or what is usually called the third strategy for trading with a bullish pin bar. These strategies are:
  • Look for bearish pin bar candle near resistance level. (we recommend 1H, 4H, 1D, 1W timeframe).
  • Place a sell stop order at the bottom of the pin bar candle.
  • Place your stop loss on the opposite side of the candle.
  • Place your initial target at 2x the risk taken.
  • Don't risk more than 1.5% on a single trade.

Advantages of Using Bullish Pin Bar

Knowing how to trade pin bars is one of the key skills you need to acquire as a forex trader as it is one of the most common price action patterns you will see on your charts. Luckily, trading pin bars themselves is not that difficult and only requires you to have a little knowledge of why pin bars form in the market, which you can easily gain by reading my article on understanding pin bars.

Identifying a trend continuation or reversal first is key to profiting from a pin bar. Typically, a pin bar will stand out from the price action, with the wick of the pin at least twice the length of the candle body. You can usually identify the context by looking at previous price action near the price of the pin bar. If the pin bar pushes higher or lower than recent price action or there is no recent price action, it is likely a reversal – a true pin bar.

The pin bar strategy is based on the simple, yet proven premise that forex pairs (and other assets) encounter resistance during a rally, but often break through it. When this happens, the previous resistance becomes the new support. Once the market finds support at the previous resistance, a bullish pin bar is formed in the process. The pin bar setup is an easy way to visualize a trend reversal in the market. If used correctly, it may be your ticket to more successful trading in the future. There are many advantages to trading this pattern.
  • Firstly, it is a very accurate pattern, and easy to recognize. You won't mess around with fancy indicators and tools.
  • Second, you have very well-defined entry and exit points, making it easy to measure risk.
  • Third, it works on any time frame and any forex pair.
After learning about bullish pin bars, then as explained about the benefits you get above, when studying bullish pin bars themselves, it can help traders to make decisions when entering. After studying it, the next thing is to register to be able to trade forex with a minimum deposit of IDR 150,000 with GIC!