In the Forex market we can predict potential price movements through the analysis of candlestick patterns and formations. In this weeks public blog we are looking at a very important type of candle formation – the bullish pin bar. Some new forex traders underestimate the value and information we can ascertain from Japanese Candlesticks before we even attempt to load any indicators onto our charts. As you’ll learn in the FX Axe course, understanding the various patterns and formations the markets can produce is an essential stepping stone for a forex beginner looking to learn and invest in the world of Foreign Exchange.
A bullish pin bar can be identified as a candle that looks similar to a hammer. We have a long wick to the downside (where price has been testing a lower level of the market, perhaps a support zone) and a small body that has closed above the previous candle. This type of candle is very simple to spot on any timeframe once you know what to look for and can be especially useful when forecasting price on the Daily Chart. Here’s an example of 3 bullish pin bars on the EUR/USD in the space three months:
Make sure you read our analysis created on TradingView! We can see long wicks to the downside highlighted by three purple circles. We can see price has rallied in the days following our bullish pin bar. This shows the importance of identifying these candles in order make your forecasting more accurate. Each of these moves are over 100 pips, with the third bullish pin bar highlighted leading to a 200 pip move to the upside!
Through our Gold and Silver Education Packages offered at FX Axe you will learn how to spot these moves on the Daily Chart and scale down to lower timeframes in order to catch these intraday moves and make pips, profits and perfect trades in the Forex market. Sign up today by booking a 10 minute free consultation with one of our professional traders here at FX Axe. Alternatively, join our telegram community – the link is in our Instagram bio! We are also offering several freebies including a 7 day trial to our Forex Signals! Happy Trading, and be sure to practice identifying candlestick formations before flooding your charts with indicators!