#Educational || Last week I spotted the pinbar on $BTC and turned bullish intraday.
So what is a pinbar and how do others trade it? A little thread👇🧵
So what is a pinbar and how do others trade it? A little thread👇🧵
Table of Content
1. What is it?
2. Psychology of the pinbar.
3. An extra thread on demand and supply
4. The pinbar in context of market structure
5. How to trade it?
1. What is it?
2. Psychology of the pinbar.
3. An extra thread on demand and supply
4. The pinbar in context of market structure
5. How to trade it?
1. What is it?
A pin bar pattern consists of one price bar, which represents a sharp reversal and rejection of price. The area between the open and close of the pin bar is called its “real body”, and pin bars generally have small real bodies in comparison to their long tails.
A pin bar pattern consists of one price bar, which represents a sharp reversal and rejection of price. The area between the open and close of the pin bar is called its “real body”, and pin bars generally have small real bodies in comparison to their long tails.
1.1 What is it?
The tail of the pin bar shows the area of price that was rejected, and the implication is that price will continue to move opposite to the direction the tail points. We will discuss the bullish form of the pinbar.
The tail of the pin bar shows the area of price that was rejected, and the implication is that price will continue to move opposite to the direction the tail points. We will discuss the bullish form of the pinbar.
2. Psychology of the pinbar
At opening, price was immediately pushed down aggressively(high inflow of supply). As price reached the low of the wick, high 'demand' push price back up. The 'demand' outweighed the supply at that time resulting in a reversal of price.
At opening, price was immediately pushed down aggressively(high inflow of supply). As price reached the low of the wick, high 'demand' push price back up. The 'demand' outweighed the supply at that time resulting in a reversal of price.
3. A thread on Demand and Supply
4.1 The pinbar in context of market structure
We map out the higher timeframe market structure. It was bullish and turned bearish after the market structure shift (mss). We target a high timeframe point of interest, preferably after a break of structure (bos).
We map out the higher timeframe market structure. It was bullish and turned bearish after the market structure shift (mss). We target a high timeframe point of interest, preferably after a break of structure (bos).
4.2 The pinbar in contex of market structure
We wait for a lower timeframe market structure shift with displacement. The higher timeframe will show the pinbar. How to trade it?
We wait for a lower timeframe market structure shift with displacement. The higher timeframe will show the pinbar. How to trade it?
5.1 How to trade it? A few options.
Enter with a market buy order after the pinbar close. This is the most risky entry.
Enter with a market buy order after the pinbar close. This is the most risky entry.
5.2 How to trade it?
Enter with a limit order after a 50% retrace of the pinbar's body. Medium risk entry.
Enter with a limit order after a 50% retrace of the pinbar's body. Medium risk entry.
5.3 How to trade it?
Enter after the second candle closes. It will provide you with more information about the intention of the market. In this case we can see a consolidation after a bullish pinbar. Expectation is that price will continue upwards. Most safe entry, but be quick
Enter after the second candle closes. It will provide you with more information about the intention of the market. In this case we can see a consolidation after a bullish pinbar. Expectation is that price will continue upwards. Most safe entry, but be quick
5.4 How to trade it? An example using the 3rd option. As you can see safe but market moves very quick. For riskier plays you can enter earlier. High leveraged trades are not advisable at this point.
Hope you learned something new today! Show some love, like, retweeting and comment!
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