Price actionPin Bar Reversal
A single candle with a long rejection wick — a hammer at support, a shooting star at resistance — marks where price was firmly rejected and points to a quick reversal.
Day tradingBeginner15m - daily
The idea
A pin bar is a single candle that tells a rejection story — a long wick with a small body, where price pushed hard in one direction during the bar and was then slammed back, leaving a tail that marks failed intent. A hammer, with a long lower wick, forms when sellers drove price down but buyers rejected the low and closed it back up; at support it signals a bullish reversal. A shooting star, its mirror, forms when buyers pushed up but sellers rejected the high; at resistance it signals a bearish reversal. The single bar is a compact, readable trigger, which makes it a favorite beginner entry. But a pin bar only matters where rejection is meaningful — at a level or with the trend — so location is everything. In the middle of nowhere it is just noise.
The setup
Mark the key levels first — support, resistance, a moving average, a prior swing — because a pin bar earns its meaning from where it forms. Then watch for a qualifying candle at one of those levels: a small real body sitting at one end, a wick at least twice the length of the body pointing into the level, and a close back in the reversal direction. A hammer pinning support or a shooting star pinning resistance is the textbook setup. The longer and cleaner the wick relative to the body, the stronger the rejection it represents. A pin bar with a stubby wick or forming mid-range is weak and best ignored.
Entry
For a hammer at support, enter long on a break above the hammer's high or on the next bar's open, confirming that the rejection is following through rather than acting on the wick alone. For a shooting star at resistance, enter short on a break below its low. The pin bar's wick gives a natural, tight stop just beyond it, which is much of the pattern's appeal — a small defined risk for a reversal trade. Requiring the break of the pin's extreme, rather than pre-empting it, filters out the pins that stall. A pin bar that also aligns with a trend pullback, such as a hammer at a rising moving average, is higher-odds than a pure counter-trend one.
Exit and targets
Reasonable targets are the next level in the reversal direction, a measured move, or a fixed multiple of the pin bar's own range projected from entry. Bank partial profit at the first level and trail the rest as the reversal extends, since a single-bar signal can precede anything from a quick bounce to a full trend change. Because the trigger is small and fast, this often plays out quickly on the lower timeframes, so manage it actively. As a day trade, respect a time stop into the close. Always secure enough at the first target that the trade is a winner even if the reversal is shallow.
Risk management
The stop belongs just beyond the pin bar's wick — below a hammer's low, above a shooting star's high — because a move through the extreme means the rejection failed and price is going the other way. Size so that distance equals a small fixed fraction of the account; a very long wick means a wider stop and thus fewer shares, keeping risk constant. The main danger is trading pins that are not at a level, which are frequent and unreliable, so demanding a meaningful location is itself the core filter. Never move the stop past the wick to give a failing pin more room. Treat each pin as a small, defined-risk probe.
Best timeframes and markets
Pin bars appear on every timeframe, but they are most reliable on the 15-minute up to the daily, where each candle represents enough activity to make the rejection meaningful; on very low timeframes they are noisy. They work across forex, stocks, and futures, since candle psychology is universal, and forex in particular is popular for clean pin-bar setups at levels. Higher timeframes produce fewer but stronger pins. The pattern is a precision trigger that needs the context of a level or trend, so it complements rather than replaces a broader read of structure.
Common mistakes and variations
The most common mistake is trading every pin bar regardless of location, when only pins at meaningful levels or with the trend have an edge. Variations include the two-bar pin combination, requiring the close to be in the top or bottom third of the range, or pairing the pin with an RSI extreme or a support-resistance level for confirmation. Some traders only take pin bars in the direction of the higher-timeframe trend, using them as pullback triggers rather than counter-trend reversals. Every version depends on the same rule: the wick shows rejection, but the level gives it meaning.
A worked example
A currency pair pulls back into a well-tested support level at 1.2500 within a broader uptrend and prints a hammer — a small body up top, a long lower wick spiking to 1.2470 and closing back at 1.2505. You buy on the break of the hammer's high at 1.2512 with a stop at 1.2465, just below the wick, risking 47 pips. You target the prior swing high near 1.2600, banking half at 1.2560 and trailing the rest. The pair reaches 1.2610 before stalling; you exit near 1.2600, blending into roughly a 1.5-to-1 winner off a single, well-placed rejection candle.