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Trade Less, But Wisely; Get Rich Step by Step
Master The Art of Trading
Pin bar and Inside bar Combo Patterns
A pin bar is a price action strategy that shows rejection of price and indicates a potential reversal is imminent. An inside bar is a price action strategy that shows consolidation and that a potential breakout is imminent. When both these signals combined, we get result in either 'pin bar combo' pattern or an 'inside bar - pin bar combo' pattern. Means there could be two types of 'combo patterns'.
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Pin bar + Inside bar
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Inside bar + Pin bar
Pin bar + Inside bar combo pattern consists of a pin bar followed by a small inside bar towards the nose of the pin (i.e. towards the pin bar's real body).
Inside bar + pin bar combo pattern is simply a set up of pin bar which is also an inside bar. In other words, it is pin bar within the high-low range of an outside bar or mother bar.
How to Trade Pin bar and Inside bar Combo Patterns
When looking for pin bar inside bar combo patterns, you will first be looking for just a pin bar, if you see a pin bar immediately followed by an inside bar that’s contained within the high-to-low range of the pin bar, then you have a pin bar + inside bar combo pattern. As mentioned above, the inside bar should be formed near the pin bar’s nose (real body).
Of the two combo patterns discussed in this tutorial, the pin bar + inside bar combo is the most powerful and it’s an ideal setup to trade on the daily chart either from pullbacks to key levels or as breakout plays in trending markets on the 4 hour or daily charts.
In chart -1, we can see a nice example of a pin bar inside bar combo pattern that is formed following a pullback to a support level in an upward trending market. These types of combo patterns are very powerful because they give you a change to get a better entry on the pin bar (near its 50% level) and allows you to get a tight stop loss either below the inside bar low or below the key support level.
Chart -2 shows another example of the pin bar and inside bar combo pattern. This combo pattern allowed a trader to get a 'tight' entry by entering as the inside bar retraced up in the pin bar's trail, the stop loss could have been placed just above the resistance level or near the pin bar's high. We can see a sell off unfolded as price broke down below the inside bar.
How to Trade Inside Pin Bar Combo Patterns
Inside pin bars are exactly what their name suggests; pin bars that are also inside bars. These setups seem to work the best in trending markets and on the daily chart time frames.
In Chart - 3, we can see a strong uptrend was in place prior to the formation of the inside pin bar combo pattern. We can see price broke out above the high of the mother bar and this would have been the entry point into the trend. Traders can place a 'buy on stop' entry just above the mother bar high on an inside-pin bar combo setup. Then as the price breaks out in-line with the trend, you are brought into the trade in-line with the current market momentum.
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Chart - 4 shows us another example of a good inside-pin bar combo pattern. We can see that the trend was down or 'bearish', and as price consolidated for several days it ended up forming the bearish inside-pin bar sell signal. Inside pin bar combo works very good as 'continuation pattern' in the trending market where trend will continue moving in its existing direction. It should be noted that the aggressive sell off could take place once price breaks down below this inside pin bar's mother bar.
Pin Bar & Inside Bar Combo Pattern Tips
Always lookout for pin bars followed by inside bars. A one day pause after a pin bar, in the form of an inside bar, will be the last chance to enter the market before price moves away aggressively from the pin bar reversal signal.
When you place your stop loss just above (or below) the inside bar using pin bar + inside bar combo pattern, you can trade a slightly bigger position and thereby improve your risk reward scenario.
Use inside-pin bar combo set up when you notice strong trend in the market because strong trend are more reliable.
Inside-pin bar setups are best on the daily chart time frame whereas pin bar + inside bar work well on both daily and 4 hour chart time frames.
In price action trading, traders use raw price data to analyze and anticipate fure price movement of financial markets. Price action trading strategy is based on logic and simplicity, removing all external noise including news, economics and fundamental data.
Support & Resistance Levels
Inside Bar Strategy
Pin Bar Strategy
Pin Bar & Inside Bar Combo Strategy
Inside Bar False Break out
False Breakout Trading Strategy
Price Action Trading Strategies
In price action trading, traders use raw price data to analyze and anticipate fure price movement of financial markets. Price action trading strategy is based on logic and simplicity, removing all external noise including news, economics and fundamental data.
The concept of 'support & resistance' is the foundation in technical analysis of any financial asset. Many technical techniques......
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An 'inside bar' pattern is a two-bar pattern in which inside bar is smaller and within the high low range of the previous bar.......
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A pin bar pattern consists of one price bar, typically a candlestick bar, which represents a sharp reversal and rejection of price......
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Pin bar is a price action strategy showing rejecion of price and indicating a potential reversal. An inside bar shows consolidation and.....
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As the name suggests, it has a false breakout from an inside bar pattern. It is also known as 'fakey pattern......
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As the name suggests, false breakout is a breakout which has failed to continue beyond a certain level, resulting in a 'false' breakout for that level.....
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