The Pin Bar Continuation Candlestick Pattern

A Pin Bar is regularly refereed to as a reversal pattern and commonly appears at significant price action levels, these levels can be but are not limited to :

• Major support and resistance
• Swing highs and swing lows
• Fibonacci levels
• Pivot Points
• Trend Lines
• Moving Averages
• Round Number Levels

One area that is not so often talked about is trading the Pin Bar as a continuation Pattern. This Pattern appears just as regularly as the reversal Pin Bar Pattern and in my opinion is just as reliable and offers great profit opportunities.

How To Identify A Pin Bar Continuation Set Up

This set up is very similar to a Pin Bar Reversal in many ways, what we look for is a good Pin Bar to appear in an already existing trend or at a minimum to appear as part of a power move or a move where there is excellent price momentum.

What Are The Characteristics Of A Continuation Pin Bar

• As With all pins the longer the tail the better
• It must be part of the current trend and does not appear as a reversal pattern
• Is best when rejecting a significant price action level like previous support and resistance or a pivot point

Here is an example of a picture perfect Pin Bar Continuation setup

Here is a chart of the following price action of the same Continuation Pin Bar.

 

The price action that followed was explosive to say the least, the profits that would have been gained here compared to the risk is absolutely phenomenal. This clearly demonstrates that a Pin Bar Reversal is not the only way to trade a Pin, the continuation variant is just as powerful and also very easy to Identify and trade.

Stop Loss Placement For A Pin Bar Continuation

This is easily identified and set, one simply places a stop loss directly below the bottom of the Pin Bar itself. It is always good to add a few extra pips just in case the level is tested again so to avoid being stopped out. As risk is such a personal thing position size can only be calculated by the individual, I always recommend no more than 1% of capital on any one trade.

In Summary

Don't limit yourself to only Pin Bar reversal patterns, the Continuation Pin Bar is just as effective and gives a high probability trade with quite low risk parameters. Add this to your trading arsenal and watch your profits grow.