Pin Bars Explained -- with David Moadel
Hello and welcome to looking
at the markets with David Modell what is a pin bar what does it look like and
what could it mean I'm going to explain that in this video first I want to let
you know that if you don't have a plan for your trading or investing you really
ought to have one and I do coach people so that they can plan what they're doing
and where they're going with their trading or what they're investing so if
you're interested in the coaching I do offer it you can email me at David
Modell at gmail.com for the coaching so let's talk about pin bars first of all
it is it's it's not really anything special I know it's a fancy sounding
word it's a candlestick that looks kind of like a pin you know the kind of pin
that you would use with a pin cushion or with I don't know sewing or with a one
of those boards that you stick pins into okay so these kind of look like pins I
guess you could say so these are pin bars which are really a type of
candlestick for your stock chart or it could apply to crypto currencies
whatever it is commodities it's just a type of candlestick with a small body
you can see that these examples all have small bodies okay and it's going to have
a long wick on one side or the other but not both
okay if both the upper and lower wick are both very long then that's not a pin
bar okay and so you're gonna have a small wick or no wick by the way it's
showing a small wick but if it has no wick whatsoever on one side that's also
possibly a pin bar so one side is either a small wick or no wick and the other
side is a long wick and a small body okay okay and you could have the small
body way over on the bottom or near the top alright like these two all right so
that's what a pin bar is alright so whether it's bullish or bearish depends
on where it is in relation to the candles that are surrounding the pin bar
okay I've seen websites where they claim that if the pin bar looks like this or
this you know these two with the small body near the bottom that that's always
bearish and I've seen websites and videos also claim that whenever the the
the body the small body is near the top then that's always bullish I don't know
if I believe that necessarily because I don't think that you can just take a
candlestick in isolation and say oh well you know this this candle or this candle
is bearish and these two candles are bullish just because of where the body
is in relation to the wicks I don't think you can just say that in isolation
I think you need to look at the surrounding candles before you decide
whether a candle is bullish or bearish so I believe it's bullish or bearish
depending on the circumstances yeah you want to look at the the volume perhaps
for example you want to look maybe at the moving averages and indicators and
things like that and also the news what's going on why is it up or down
that kind of thing okay you want to weigh a lot of different factors but one
thing you can look at is the surrounding candlesticks alright so for example if a
pin bar you can see you got the small body you have a long wick on one side
and a small or no wick in this case on the other side and so this would be this
would be a pin bar and the small body is on the at the top of the candle but it's
at the bottom of a big down move okay so you got candles going down down down
okay and then you had this happen this pin bar and then the next few candles
went up so that's called a hammer okay that's one type of pin bar there are
four types of pin bars that I will talk about in this video so that's a hammer
candle alright it's at the bottom of a downtrend and that is oftentimes
considered bullish because you look at the price action
okay in this candle during this period the traders the sellers tried to push
the price down but then they failed the buyers bid the price right back up all
the way until the closing of this candle the closing of this period all right and
then the next couple of candles were up and so that would be perhaps
confirmation of this bullish hammer here all right but again you wouldn't know
it's a hammer unless you first saw a bunch of candles going down okay
and then afterwards one or two candles going up for confirmation and so the
context the surrounding candles make it make a difference here perhaps all right
you could take this same shape of candle and put it up here as you can see you
still have the small body near the top of the candle and a long lower wick and
a very tiny upper wick so that's still a pin bar looks a lot like this one and
yet look where it is in relation to the other candles preceding it before it you
had a bunch of candles going up and then you had the pin bar and then the candles
going down afterwards so that's not so bullish is it and that's called a
hanging man candle that's another type of pin bar but it's often considered not
bullish like the hammer but bearish okay but again you wouldn't know it unless
you saw the preceding the the candles before going up up up and then for
confirmation one or two candles going down afterwards would confirm that this
was in fact or it looks like a hanging man formation okay let's look at two
more types of pin bars all right so here's another pin bar a small body you
have one big wick the upper wick is is long then the lower wick is small or
non-existent in this case it's small okay and then you have another candle
that looks a lot like it up here okay but are they both bearish well not
necessarily this is called an inverted hammer
it is a pin bar yes but it's at the bottom after a long a bunch of red
candles or you know candles going down a bunch of bearish candles down down down
and then your pin bar with the body near the bottom and the long upper wick and
short or no lower wick and then for confirmation the next couple of candles
are up and so that could possibly confirm that this was an inverted hammer
okay because it's at the bottom of a downtrend just like the the regular
hammer okay the hammer was at the bottom of a
downtrend all right now the inverted hammer is not as bullish as the as this
hammer okay because with the regular hammer you have yes you have the bottom
of a downtrend just like the inverted hammer but you also the candle itself is
is more bullish because again as I explained previously the sellers tried
to push the price down but then failed and it closed near or at the top of the
candle of the period whereas with the inverted hammer it's not quite as
bullish in the price action of this candle because the buyers tried to push
it up but then they failed and it closed near the low of that period or have that
candle so it's not quite as as bullish although it it is mildly often
considered mildly bullish okay because it is at the bottom of a downtrend and
if the next couple of candles were up that would confirm that it's an inverted
hammer so it's slightly bullish whereas this is quite bullish oftentimes again
you have to look at other factors though look at the volume look at other
indicators look at the news and so on well what if that same type of candle
shape is at the top of an uptrend you had a bunch of candles green ones or
whatever a bunch of you know bullish candles going up up up and then you get
this thing over here this pin bar well that's called a shooting star especially
if you get a couple of confirming confirmation
candles red ones going down and down then that's called a shooting star and
that's considered quite bearish because not only is it at the top of an uptrend
and you had a couple of red confirming candles afterwards going down but also
look at the candle itself look at what happened during this period the buyers
tried to push the price up but then failed and the sellers took over and
closed it near the low or at the low of this period of this candle all right and
so the shooting star would be considered even more bearish than the hanging man I
know the hanging man has an ominous name and it sounds very bearish but really I
personally usually consider it not always but usually consider it only
slightly or mildly bearish because the during this candle during this period
the buyers still did prevail they still did win in the end of this period okay
the sellers tried to push it down but then failed the buyers took control back
and pushed it back up and it closed near the high of this period okay so this pin
bar the hanging man would probably be by itself although it is moderately bearish
because it's at the top of an uptrend and you have a couple of confirming
candles here still the shooting star is often times considered more bearish than
the invert then the the hanging man I should say okay so there you go for
different types of pin bars and so if you see a video on youtube somewhere
made by somebody else or an article like I've seen these where they say uh you
know if it looks like this it's always gonna be bearish and if it's shaped like
this it's always going to be bullish I don't know that I would believe it
necessarily I think you need to look at the context the surrounding candles
where is it in relation to other candles and other factors as well and I'm going
to show you an example here on trading view okay take a look at this and can
you find the pin bar the important the important
pinbar in this chart here I think you probably probably found it by now there
are a number of pin bars okay like for example there's a pin bar here but it's
it's is it an important one not really this one this is the important one okay
because as you can see downtrend down down down and then look at that do you
see that that hammer candle right the the sellers tried to push it down but
then the buyers took back control and closed it near the you know near the
high of that period okay and this is a daily candlestick chart of Apple by the
way but it doesn't matter so and then there you know there's a long lower wick
and hardly barely any upper wick and small body okay so that's a pin bar and
say hammer and you can see it was confirmed by the next couple of candles
that were up alright next three candles were up and it just kept going up and up
and up it does not always happen like this this does not work perfectly every
time okay it's just one example alright so I hope
that that was helpful with pin bars but you know this in itself is not a trading
strategy by itself it's not a trading or investing plan you want to have a plan
okay I do offer coaching I help people put together plans for their trading or
their investing you can email me for the coaching at David Modell at gmail.com I
want to thank you so much for watching and for listening and hey I will talk to
you again really really soon
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