I've seen many times how traders miss great entry points simply because they don't know about pin bars. Honestly, this is one of the most reliable patterns I use in my trading.

So, what is a bullish pin bar? It is a candle with a small body, which can be either red or green, but with a very long lower shadow and a short upper shadow. The main condition is that the lower shadow should be at least two-thirds of the entire candle length. When you see such a pattern, it indicates that the price dropped sharply during the period but was then pushed back up. This is a clear signal that buyers are entering the market.

But here’s the catch — a pin bar doesn’t always work. I’ve noticed that you need to follow a few conditions to avoid catching a false signal. First of all, if you're looking for a trend reversal, there should be a downtrend with higher highs and higher lows before the pin bar. If it’s a continuation signal, then the previous trend can be either up or down.

Another point I highly recommend considering is that the previous and the next candle after the formation of the pin bar should not touch its minimum. It sounds strange, but it really helps filter out many false signals. I remember, on the TSLA hourly chart, there was a great green pin bar at the end of a decline, and the lows of the neighboring candles were much higher — that was a perfect trigger.

And on October 19, 2020, I saw a classic example of a pin bar that didn’t work. The trend was upward, the pattern was formed correctly, but the next candle’s price simply fell below the pin bar’s low, invalidating the signal. That’s why you always need to look for additional confirmation — maybe a breakout of a key level or a bullish crossover of indicators.

In general, the pin bar is a great tool, but only if used correctly. Don’t be lazy and check all the conditions before entering.