As a general rule, we want to trade pin bar setups from key swing points. If we are trading them counter-trend, we’d like to sell at a SH (swing high), or buy at a SL (swing low). If we are trading them with trend, then we want to trade them on pullbacks into key support and resistance levels.
But there is another common price action environment whereby trading pin bars can result in high probability setups. That is from consolidations.
We know by now that pin bars are a useful forex trading tool but give best results when used in combination with other price action cues, such as at key support and the resistance levels.
One should always take only the best pin bar trades visible at swing low or swing high or at the confluence of dynamic moving averages or other areas of support to resistance. Ensure that the pin bar looks right before you take a trading decision based on it. The task of identifying true pin bars becomes easier as you gain more understanding about the reaction of pin bars to price. Till that time avoid trading at pins that you are doubtful of them.
The pin bar trading strategy, is a price action reversal trade setup that can be used to make money from the markets when used correctly. In this lesson we will explain what a pin bar is, and how to use one when you see it in the correct manner to setup profitable trades in the market.