When I first started trading, one pattern helped me most often to be right — it was the pin bar. Honestly, it’s the most understandable tool for beginners, and I still use it today. I’ll show how it works in practice.

I do this: I see a candle that first moves in one direction, then suddenly reverses. That’s the pin bar. It looks simple — a small body, one long tail, and almost nothing on the other side. The close happens near the edge, closer to the end of that tail. If the price was falling, then reversed upward and closed at the top — that’s a bullish pin bar. If the opposite — a bearish one.

What’s the essence? The market shows that someone tried to push the price down but was met with resistance. This can be a reversal or just a strong reaction at a level. In practice, the pin bar often triggers exactly at such key levels.

But here’s what’s important — if before the pin bar there’s a large candle that engulfs it, then the reversal might not be as strong. This is called engulfing, and I’ve noticed that in such cases, the market often continues its movement rather than reversing. Be cautious with such situations.

How do I trade the pin bar? I wait until the candle fully closes, then open a trade on the next candle. Not at market, but with a limit order at the pin bar’s opening price. For example, if the pin bar opened at 29,500 and closed at 30,000, I place a limit order at 29,500 and wait for a pullback. I set the stop-loss slightly below the tail, around 28,950. I take profit 2-3 times larger than the stop or up to the nearest resistance level.

Another point — I look at the 30-period moving average MA30. If the pin bar is above it, I look for a long. If below — a short. I don’t trade against the moving average unless the level is very strong.

Simply put, the pin bar is a reversal candle that provides good risk management. You enter at the opening price, catch the pullback, and follow the movement. But remember about engulfing — if it’s present, the probability of a reversal decreases. This simple tool has helped me for a long time. If you’re interested in even more trading schemes that really work — follow for updates.