Trading Pin Bar pattern
The Pin Bar binary options strategy is very easy to use. It can be used by both professional and novice traders.
To perform this type of trading you have to open an account at a binary broker and at a chart provider.
Besides, this system, in contrast to other binary options strategies and can be used without any specific skills and knowledge of fundamental analysis intricacies. At the same time, the strategy is so versatile that it can be used in commodity, futures, stocks and Forex currency pairs trading.
Types of charts which you can use
The Pin Bar strategy for binary trading can be used on different types of graphs. Those who are comfortable trading using bars should look for a model consisting of three bars.
Others who prefer the Japanese candles will have to look for a model that consists of a single candle. Closure of the bar, which is located on the left, should be in the opening part of the middle bar, hence the middle bar must close near the opening of the right bar.
At the same time, middle bar must have a sufficiently long shadow, which greatly extends beyond the left and right bars.
Bearish / Bullish Pin Bar patterns
Before you begin to understand the use of the strategy, it is necessary to understand what a pin-bar, which is located in the middle is and how it should look. First of all, it should be noted that pin bars have such a property as a long shadow. Sometimes in trading literature, this shadow can be called a spike.
The spike or shade should be long enough.
Thus, they are directed in the opposite direction from the current movement. It is important to note that the longer the spike, the greater the chance that strategy works out is. The ideal variant is when the spike goes far beyond the previous bar or candle, and the body does not go beyond it.
In some cases, the Hammer’s body (this is "The Hammer" of candlesticks) or pin bar may go beyond the previous one. But in order to make the signal as clear as possible, it is better to wait for such a pin bar that doesn’t. There is another important point. Hammer’s spike must exceed several times the length of his body.
Bearish Pin Bar pattern
Bullish Pin Bar pattern
When we buy call or put option?
Finally, after we’ve discussed how this pattern looks on the chart, you can go directly to the recommendations for the opening of trading positions. Binary options buying is carried out when there is an evidence of the last candle in combination.
When it comes to the situation with a rising trend, the body of the third bar should go beyond the body of the second. Therefore we can say that the pattern is confirmed. In this situation, you can buy Call binary option.
If it is a downtrend, it is important the bearish bar on the right of the pin bar to cross the body of the candle from the top down. It will consider that the market will continue its bearish trend and you can buy a Put binary option.
It should be noted that despite the fact that the strategy is simple enough, beginners are advised to carefully look closely to the emerging market model. It is important to wait for the formation of such a figure and its confirmation in the form of the third bar.