Pinbar Detector Indicator

As the name suggests Pinbar detector is a candle detector indicator that identifies the high probability pin bars in the forex market. Pinbar trading is a price action based trading strategy that gives a very good risk to reward ratio.

Priceaction is the movement of a security’s price plotted over time. A pin bar pattern consists of one price bar, typically a candlestick price bar, which represents a sharp reversal and rejection of price.

The tail of the pin bar shows the area of the price that was rejected, and the implication is that price will continue to move opposite to the direction the tail points. Let’s try to understand the logic behind this trading system with some examples.

Pinbar Detector Indicator Overview

Pinbar Detector Indicator Overview

A bearish pin bar signal is one that has a long upper tail and a small body, showing rejection of higher prices with the implication that price will fall in the near-term.

A bullish pin bar signal has a long lower tail, showing rejection of lower prices with the implication that price will rise in the near-term.

Also, it’s very important to understand the context of the market before trading any pinbars. If the market is in the trading range then pin bars can be used for trading entry near support and resistance areas.

If markets are in trend then traders can use pin bars to trade the end of the pullback. Sometimes the failure of the pin bar gives more accurate signals than the pin bar itself.

Pinbar Detector Indicator Explanation

Pinbar Detector Indicator Explanation

In this trading system, a moving average of 200,100 and 50 are used to identify the trend. If the price is trading above all moving average and the trend is up, traders should trade the breakout of the high of bullish or bearish pin bars in the favour of the trend.

If the price is trading below the moving averages and forming lower high and lower low structure then traders should trade the breakdown of low of bearish or bullish pin bars.

Pinbar Detector: Buy Conditions

Pinbar Detector Buy Signals
  • Price should trade above all moving averages.
  • Bearish or bullish pin bar formation above the moving averages.
  • Breakout of the high of pin bar can be used as an entry for trade.
  • Traders can hold the trade till the time price is trading above the moving averages.

Check Out: Donchian Channel with EMA

Pinbar Detector: Sell conditions

Pinbar Detector Sell Signals
  • Price should trade below all moving averages.
  • Bearish or bullish pin bar formation above the moving averages.
  • Breakout of the low pin bar can be used as an entry for trade.
  • Traders can hold the trade till the time price is trading above the moving averages.

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I have been actively trading stocks and currencies since April 2012. Besides trading with my personal money I am a technical analyst in a mutual fund which has Rs. 1 billion in assets under management. At my leisure, I love attending live music, traveling, and partying with friends.

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