What’s the Difference Between a Pin Bar and a Hanging Man?
#529: What’s the Difference Between a Pin Bar and a Hanging Man?
In this video:
00:29 – Pin bars and a Hanging Man candle.
00:52 – I trade neither candle.
01:12 – How to use a Pin bar or Hanging Man candle.
01:52 – How the Pin Bar and Hanging Man are formed.
04:35 – Find out more about how we trade and how we can help you.
04:55 – Book a call and have a chat with us.
05:06 – Trade through Blueberry Markets.
What’s the difference between a pin bar and the hanging man candle formation? And how can they help you to increase your performance as a trader? Let’s get into that and more. Right now.
Hey traders. Andrew Mitchem here at the Forex Trading Coach with video and podcast number 529.
Pin bars and a Hanging Man candle.
Now I want to talk about two candle patterns that often cause confusion for people. And one is a pin bar and the other is a hanging man. And for a lot of people, they kind of look the same and they don’t quite understand how to use them and what’s actually happening behind the scenes in the market conditions to create those patterns within your charts.
I trade neither candle.
It’s important to note also that I do not trade a pin bar or hanging man purely as a candle pattern. However, they can be really influential in my trading because they give me an early warning system or give me a clue as to a potential change of direction.
How to use a Pin bar or Hanging Man candle
So if I’m not in a trade, they can give me the clue that. “Hey, look, the market may be just stalling here, here, or potentially changing direction.” I still need confirmation after the pin bar or the hanging man.
The other scenario is if I’m already in a trade and I see a pin bar or hanging man pattern show on the charts, but I haven’t quite reached my profit target yet. So what that is telling me is, “Hey, look, this could be a really good opportunity now to potentially really look at closing some of the trade or X thing and total the entire position and early because we could now be getting a change in direction against where we’re looking for the trade to move.”
So what is a pin bar? What is a hanging man pattern? Well, basically to me they both are Indecision Candles. They tell me there’s a lot of movemant in the market, but the market’s not quite decided which way it’s heading.
So let’s use an uptrend as an example. If the market’s currently in a really good, strong uptrend and we see a pin bar show, a pin bar will be a candle with a small body but a long upper wick.
And what that means is that the uptrend has continued and it’s gone really strongly upwards. And at some stage during that candles formation, that would have been a good, strong bullish candle. However, before the candle is closed, the price has come all the way back down to either just above its open or even potentially just below. It’s opened, it’s open price and it’s formed that small body, but with the long upper wick in an uptrend.
So that tells me that the price is exhausted. It may have hit a certain level and now the sellers are starting to push the market down. I still need a confirmation candle to come next. So next outside bar and engulfing bar, probably an engulfing bar in that scenario. To suggest that, yes, the downtrend is about to then be strong enough to justify a trade.
If we use that same bullish uptrend, but instead of the pin bar, we get a hanging band pattern that means that we get a small body near the top of the candle, yet along with lower wick. What that tells me is that the price has moved up and then when the hanging man pattern is formed during that candle formation, the sellers really took over and pushed the price down.
However, by the close of the candle, the price had retraced back up again and the buyers was still pushing it higher. And and that could be a close higher or it could be a closed lower than the open. But in general, it’s like a small body of the candle near the high of the candle and a long lower wick.
So that tells me again, this a bit of indecision sellers have taken over, the buyers pull back, but there are certainly sellers in the market again. I need confirmation with an engulfing candle or an outside candle. So I can next to confirm that the downtrend really is in play. So two different ways you can trade there. Both in an uptrend scenario and both the pin bar and the Hanging man give two different types of ideas of what’s happening in the market.
But they give us that early warning that the trend may be starting to turn downwards. So that’s how you use them.
Find out more about how we trade and how we can help you.
If you’d like to find out more about how we use them in detail and in more context and what part of the charts and the other things we look at as well, the round numbers, the trend line break all those type of things and have a look at the link here below and I’ll put a link to my masterclass where you can jump on to an hour long session.
Book a call and have a chat with us.
If you’d like to talk to us personally about how we trade and how we can help you up and link to so you can call or book a call with one of us as well.
Trade through Blueberry Markets.
And if you’re looking for a fantastic broker, I can highly recommend Blueberry Markets. I’ll put a link to them as well. They offer the MT4 and the MT5 trading platform, and they’re just a great bunch of people, incredible customer support, and I’ve been with them for years and years and hundreds of my clients use them as well. We always get amazing feedback from Blueberry Markets.
So I hope that helps. That’s today’s lesson about hanging man Candles, about the pin bar candles, how you can use them, book a call or jump onto the Masterclass free webinar to find out more about how we use them and how we can help you to use them to be a profitable trader.
This is Andrew Mitchem at the Forex Trading Cooch. I see you this time next week with another video and podcast. Bye for now!