A powerful combo strategy with Pin Bar and Inside Bar
Trading with pin bars and inside bars is part of a price action technique. Pin bars indicate that the price level is rejected and you can expect the reversal soon. Inside bars inform about the consolidation in prices and a possible breakout. Used together, give powerful combinations that are called an inside bar – pin bar combo and pin bar combo patterns.
- The pin bar – inside bar combo pattern is built on the inside bar which is engulfed by the previous pin bar (the whole inside bar is located within the pin bar's price range).
- The inside pin bar combo signifies that the pin bar is the inside bar at the same time. This means the pin bar is situated within the outside mother bar which is also a pin bar.
Trading with the use of the pin bar and inside bar combo pattern
Observe the price chart carefully. Look for the pin bar. When you spot one, wait whether the inside bar will develop after it or check if that pin bar is inside the preceding candle (mother bar). When the inside bar appears and is consumed by the pin bar, you get the pin bar – inside bar combo pattern. Ideally, the inside bar will be located within the pin bar‘s body.
Look at the exemplary chart below. There is the uptrend with a pullback to the support level. At this moment, a pin bar has developed. It is followed by not one, but two inside bars. Your entry point is right after the combo pattern. With 5-minute period candles, you should keep the position open for at least 30 minutes.
In the next picture, the resistance line is drawn. The price reaches the resistance and a bearish pin bar is formed with the following inside bar. This shows the false breakout from the resistance level after which the price moves downwards. Enter the sell position right after the combo pattern and hold it for at least 30 minutes when using 5-minute period candles.
Trading with the use of the inside – pin bar combo pattern
Take a look at the chart below. There is a strong uptrend. At some point, the inside pin bar combo pattern develops. Once you recognise the pattern, you should trade along with the trend and open a buy position.
Now, the situation in the market is the opposite. The price is running abruptly downwards. Then, the inside pin bar pattern appears. It gives the signal that the trend will continue in the previous direction. Thus, you should open a sell position right after the inside pin bar combo pattern.
A handful of advice on trading with the pin bar and inside bar combo patterns
Follow the price movements in your chart and look for the pin bars that are followed by the inside bar.
Open the position the moment the pattern is completed to get the chance for higher profits.
Use the pin bar and inside bar combo patterns as reversal signals on important price levels.
Tell us about your experience in trading with the pin bar and inside bar combo patterns on the IQ Option platform. Kindly use the comments section which you will find further down the site.
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