One of the most lucrative and compelling price action signals of all the price action strategies is no doubt the pin bar reversal pattern. The pin bar was originally given that name in short for the ‘Pinocchio Bar’ by Martin Pring. It is also a coincidence that the actual candlestick formation does look like a ‘pin’ shape, reinforcing the name from a different angle.
Pin bar reversals are one of the most versatile trading strategies out there, and there are plenty of trading opportunities created by them. Pin bars are typically used to enter in with trend momentum. Pin bars can also be the catalysts for complete market reversals, like at range tops or major weekly turning points, and they can even be a good way to capitalize on breakout traps of important areas on the chart.
In this trading lesson we are going to look into how it’s possible to take advantage of this powerful and lucrative price action setup. CLICK FOR MORE →
AUD/USD (daily chart as of October 24, 2013) retreated from the October 23 high of 0.9756 and broke down below the daily EMA 200, to test a short-term uptrend line that extended back to August 30 (bold blue line on chart). The Aussie is under pressure due to concerns about large bad loans being written off at major Chinese banks and a short-term rate spike, which are bearish for the Asian markets. CLICK FOR MORE →
AUD/USD (daily chart as of September 26, 2013) broke out above the resistance zone of 0.9315-0.9385 on September 18 and reached a high of 0.9527. However, the subsequent trading sessions from September 19 to 25 wiped out all the gains of September 18, which is a potential warning sign of weakening upside momentum. Price is currently testing the mentioned resistance (now support) zone, and it needs to hold 0.9315 to strengthen the trend reversal with higher highs and higher lows in the making. CLICK FOR MORE →
AUD/USD (daily chart as of September 18, 2013) broke above the revised neckline (bold red line on the chart) of a potential inverted head and shoulders reversal pattern on September 9, and also broke above the EMA 20 and EMA 50 for the first time since the steep downtrend started back in mid-April. The currency pair has been making higher highs and higher lows since August 5, and it appears that the EMA 20 is about to make a bullish crossover above the EMA 50, which is potentially another bullish signal. CLICK FOR MORE →
AUD/USD (daily chart as of September 10, 2013) finally broke above the EMA 20 significantly for the first time since mid-April, after testing the line for only two trading sessions. This time, the price behavior appears completely different from the previous two choppy tests (pink and silver rectangle shapes on the chart) that eventually failed. CLICK FOR MORE →
AUD/USD (daily chart as of September 3, 2013) bounced off 0.8890 on August 30 and positioned to test 0.9000, which is a psychologically significant level, the low of July 12, and also around the current daily EMA 20. The currency pair has been trading in a complex manner since June 20, consolidating the steep downtrend that started back in April. Price needs to hold 0.8850 and stay above the EMA 20 or 0.9000 to make a potential near-term reversal pattern possible. CLICK FOR MORE →
USD/JPY (daily chart as of August 28, 2013) reached a high of 99.00 on August 23 and formed a small doji right at the short-term downtrend line (bold blue line on the chart), which could be a bearish reversal signal. Right next to the August 23 doji there was another small doji followed by a long bearish candlestick, which strengthened the signal. The pair needs to break down below the important 95.70/80 support region to confirm the bearish signal. CLICK FOR MORE →
AUD/USD (daily chart as of August 9, 2013) broke down on July 30 below a short-term uptrend line connecting the July 12 low and the July 25 low, which invalidated a possible “inverse head and shoulders” pattern. Price then fell down to a low of 0.8850 on August 5 and formed a “hammer,” which was confirmed by the following three trading sessions with all bullish candlesticks. Price action has now become more complicated, as expected. CLICK FOR MORE →
The strong down bar enclosed in the red oval on the weekly chart of the 30 YR US T-Bond is a significant warning that the long horizon uptrend could be in trouble. Not only does the bar close below the 135’07 level referenced in my June posting, but it is also the longest bar within this entire retracement since the all-time highs were established last year. The simultaneous occurrence of these two ways to test for trend damage compounds their bearish significance. CLICK FOR MORE →
AUD/USD (daily chart as of July 29, 2013) has been trading below the key resistance of 0.9300/40 for more than a month. The pair broke out above a falling wedge on July 9, and reached a high of 0.9300 on July 11. The 0.9300 level is the first strong resistance that the pair was expected to face. A potential “head and shoulders bottom” (or “inverse head and shoulders”) pattern is in the making (on the daily chart: LS-Left Shoulder; H-Head; RS-Right Shoulder). The neckline is right in the resistance zone between 0.9300 and 0.9340/80. The pair needs to break out above that neckline and the resistance zone to confirm the bullish reversal pattern. An initial projection target would be around 0.9650. CLICK FOR MORE →