PINOCCHIO BAR
The Pinocchio bar (pin bar) is a very popular price pattern among active traders. In Martin he called the pattern Pinocchio because it lies.
It lies about the market direction. And its long nose exposes the lie.
It looks like the nose of Pinocchio. It has a long and obvious tail.
For bullish pin bars, the lower tail take up most of the bar. For bearish pin bars, it is the upper tail that dominates.
What does it mean?
Paraphrasing Martin Pring, the pin bar lies like Pinocchio.
With its long tail, a pin bar breaks a support or resistance momentarily to trick traders into entering the wrong direction. These traders are trapped.
How do we trade it?
- Buy above a bullish pin bar that is rejected from support level
- Sell below a bearish pin bar that is rejected from a resistance level
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